Correlation Between Full Truck and Logiq
Can any of the company-specific risk be diversified away by investing in both Full Truck and Logiq 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 Logiq 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 Logiq Inc, you can compare the effects of market volatilities on Full Truck and Logiq 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 Logiq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Full Truck and Logiq.
Diversification Opportunities for Full Truck and Logiq
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Full and Logiq is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Full Truck Alliance and Logiq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logiq 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 Logiq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logiq Inc has no effect on the direction of Full Truck i.e., Full Truck and Logiq go up and down completely randomly.
Pair Corralation between Full Truck and Logiq
Considering the 90-day investment horizon Full Truck is expected to generate 1.83 times less return on investment than Logiq. But when comparing it to its historical volatility, Full Truck Alliance is 4.22 times less risky than Logiq. It trades about 0.02 of its potential returns per unit of risk. Logiq Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Logiq Inc on August 28, 2024 and sell it today you would lose (37.20) from holding Logiq Inc or give up 95.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Full Truck Alliance vs. Logiq Inc
Performance |
| Timeline |
| Full Truck Alliance |
| Logiq Inc |
Full Truck and Logiq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Full Truck and Logiq
The main advantage of trading using opposite Full Truck and Logiq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Full Truck position performs unexpectedly, Logiq 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 Logiq will offset losses from the drop in Logiq's long position.The idea behind Full Truck Alliance and Logiq Inc 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.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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