Correlation Between Full Truck and ADEIA P

Can any of the company-specific risk be diversified away by investing in both Full Truck and ADEIA P 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 ADEIA P 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 ADEIA P, you can compare the effects of market volatilities on Full Truck and ADEIA P 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 ADEIA P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Full Truck and ADEIA P.

Diversification Opportunities for Full Truck and ADEIA P

0.72

Correlation Coefficient

Full Truck  ADEIA P

Poor diversification

The 3 months correlation between Full and ADEIA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Full Truck Alliance and ADEIA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADEIA P 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 ADEIA P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADEIA P has no effect on the direction of Full Truck i.e., Full Truck and ADEIA P go up and down completely randomly.

Pair Corralation between Full Truck and ADEIA P

Considering the 90-day investment horizon Full Truck is expected to generate 1.44 times less return on investment than ADEIA P. In addition to that, Full Truck is 1.55 times more volatile than ADEIA P. It trades about 0.09 of its total potential returns per unit of risk. ADEIA P is currently generating about 0.19 per unit of volatility. If you would invest  1,245  in ADEIA P on October 4, 2024 and sell it today you would earn a total of  126.00  from holding ADEIA P or generate 10.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Full Truck Alliance  vs.  ADEIA P

Full Truck Alliance

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Full Truck Alliance are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Full Truck may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ADEIA P

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ADEIA P are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, ADEIA P sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Full Truck and ADEIA P

The main advantage of trading using opposite Full Truck and ADEIA P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Full Truck position performs unexpectedly, ADEIA P 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 ADEIA P will offset losses from the drop in ADEIA P's long position.

The idea behind Full Truck Alliance and ADEIA P 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.