Correlation Between Full Truck and Domo
Can any of the company-specific risk be diversified away by investing in both Full Truck and Domo 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 Full Truck and Domo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Full Truck Alliance and Domo Inc, you can compare the effects of market volatilities on Full Truck and Domo 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 Full Truck with a short position of Domo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Full Truck and Domo.
Diversification Opportunities for Full Truck and Domo
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Full and Domo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Full Truck Alliance and Domo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domo Inc and Full Truck 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 Full Truck Alliance are associated (or correlated) with Domo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domo Inc has no effect on the direction of Full Truck i.e., Full Truck and Domo go up and down completely randomly.
Pair Corralation between Full Truck and Domo
Considering the 90-day investment horizon Full Truck is expected to generate 1.78 times less return on investment than Domo. But when comparing it to its historical volatility, Full Truck Alliance is 1.31 times less risky than Domo. It trades about 0.28 of its potential returns per unit of risk. Domo Inc is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 698.00 in Domo Inc on November 9, 2024 and sell it today you would earn a total of 147.00 from holding Domo Inc or generate 21.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Full Truck Alliance vs. Domo Inc
Performance |
| Timeline |
| Full Truck Alliance |
| Domo Inc |
Full Truck and Domo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Full Truck and Domo
The main advantage of trading using opposite Full Truck and Domo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Full Truck position performs unexpectedly, Domo 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 Domo will offset losses from the drop in Domo's long position.| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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