Correlation Between Full Truck and Workday
Can any of the company-specific risk be diversified away by investing in both Full Truck and Workday 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 Workday 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 Workday, you can compare the effects of market volatilities on Full Truck and Workday 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 Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Full Truck and Workday.
Diversification Opportunities for Full Truck and Workday
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Full and Workday is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Full Truck Alliance and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday 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 Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of Full Truck i.e., Full Truck and Workday go up and down completely randomly.
Pair Corralation between Full Truck and Workday
Considering the 90-day investment horizon Full Truck is expected to generate 2.76 times less return on investment than Workday. In addition to that, Full Truck is 1.87 times more volatile than Workday. It trades about 0.06 of its total potential returns per unit of risk. Workday is currently generating about 0.32 per unit of volatility. If you would invest 23,495 in Workday on August 27, 2024 and sell it today you would earn a total of 3,274 from holding Workday or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Full Truck Alliance vs. Workday
Performance |
| Timeline |
| Full Truck Alliance |
| Workday |
Full Truck and Workday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Full Truck and Workday
The main advantage of trading using opposite Full Truck and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Full Truck position performs unexpectedly, Workday 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 Workday will offset losses from the drop in Workday's long position.The idea behind Full Truck Alliance and Workday 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.| Workday vs. Intuit Inc | Workday vs. Zoom Video Communications | Workday vs. ServiceNow | Workday vs. Snowflake |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |