Correlation Between Capital Income and Full Truck
Can any of the company-specific risk be diversified away by investing in both Capital Income and Full Truck at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Capital Income and Full Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Full Truck Alliance, you can compare the effects of market volatilities on Capital Income and Full Truck and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Capital Income with a short position of Full Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Full Truck.
Diversification Opportunities for Capital Income and Full Truck
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Full is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Full Truck Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Full Truck Alliance and Capital Income is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Capital Income Builder are associated (or correlated) with Full Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Full Truck Alliance has no effect on the direction of Capital Income i.e., Capital Income and Full Truck go up and down completely randomly.
Pair Corralation between Capital Income and Full Truck
Assuming the 90 days horizon Capital Income is expected to generate 6.39 times less return on investment than Full Truck. But when comparing it to its historical volatility, Capital Income Builder is 5.17 times less risky than Full Truck. It trades about 0.08 of its potential returns per unit of risk. Full Truck Alliance is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 605.00 in Full Truck Alliance on November 3, 2024 and sell it today you would earn a total of 521.00 from holding Full Truck Alliance or generate 86.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Capital Income Builder vs. Full Truck Alliance
Performance |
| Timeline |
| Capital Income Builder |
| Full Truck Alliance |
Capital Income and Full Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Full Truck
The main advantage of trading using opposite Capital Income and Full Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Full Truck can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Full Truck will offset losses from the drop in Full Truck's long position.| Capital Income vs. Blackrock Financial Institutions | Capital Income vs. Fidelity Advisor Financial | Capital Income vs. Blackstone Secured Lending | Capital Income vs. 1919 Financial Services |
| Full Truck vs. Domo Inc | Full Truck vs. Oblong Inc | Full Truck vs. Kingsoft Cloud Holdings | Full Truck vs. Bm Technologies |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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