Correlation Between Dow Jones and Full Truck
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Full Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Full Truck Alliance, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Full Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Full Truck.
Diversification Opportunities for Dow Jones and Full Truck
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Full is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Full Truck go up and down completely randomly.
Pair Corralation between Dow Jones and Full Truck
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.81 times less return on investment than Full Truck. But when comparing it to its historical volatility, Dow Jones Industrial is 3.74 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Full Truck Alliance
Performance |
| Timeline |
Dow Jones and Full Truck Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Full Truck Alliance
Pair trading matchups for Full Truck
Pair Trading with Dow Jones and Full Truck
The main advantage of trading using opposite Dow Jones and Full Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance |