Correlation Between Full Truck and EPlus

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

Diversification Opportunities for Full Truck and EPlus

0.03

Correlation Coefficient

Full Truck  EPlus

Significant diversification

The 3 months correlation between Full and EPlus is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Full Truck Alliance and ePlus inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlus 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 EPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlus inc has no effect on the direction of Full Truck i.e., Full Truck and EPlus go up and down completely randomly.

Pair Corralation between Full Truck and EPlus

Considering the 90-day investment horizon Full Truck Alliance is expected to generate 1.16 times more return on investment than EPlus. However, Full Truck is 1.16 times more volatile than ePlus inc. It trades about 0.17 of its potential returns per unit of risk. ePlus inc is currently generating about -0.04 per unit of risk. If you would invest  717.00  in Full Truck Alliance on September 2, 2024 and sell it today you would earn a total of  284.00  from holding Full Truck Alliance or generate 39.61% return on investment over 90 days.

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

Full Truck Alliance  vs.  ePlus inc

Full Truck Alliance

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Full Truck Alliance are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Full Truck displayed solid returns over the last few months and may actually be approaching a breakup point.

ePlus inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ePlus inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Full Truck and EPlus

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

The idea behind Full Truck Alliance and ePlus 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.