Correlation Between VTEX and Full Truck
Can any of the company-specific risk be diversified away by investing in both VTEX 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 VTEX and Full Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VTEX and Full Truck Alliance, you can compare the effects of market volatilities on VTEX 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 VTEX with a short position of Full Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of VTEX and Full Truck.
Diversification Opportunities for VTEX and Full Truck
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VTEX and Full is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding VTEX 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 VTEX 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 VTEX 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 VTEX i.e., VTEX and Full Truck go up and down completely randomly.
Pair Corralation between VTEX and Full Truck
Given the investment horizon of 90 days VTEX is expected to under-perform the Full Truck. But the stock apears to be less risky and, when comparing its historical volatility, VTEX is 1.0 times less risky than Full Truck. The stock trades about -0.01 of its potential returns per unit of risk. The 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VTEX vs. Full Truck Alliance
Performance |
| Timeline |
| VTEX |
| Full Truck Alliance |
VTEX and Full Truck Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VTEX and Full Truck
The main advantage of trading using opposite VTEX and Full Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VTEX 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.The idea behind VTEX and Full Truck Alliance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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