Correlation Between Diageo PLC and VinFast Auto
Can any of the company-specific risk be diversified away by investing in both Diageo PLC and VinFast Auto 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 Diageo PLC and VinFast Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diageo PLC ADR and VinFast Auto Ltd, you can compare the effects of market volatilities on Diageo PLC and VinFast Auto 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 Diageo PLC with a short position of VinFast Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diageo PLC and VinFast Auto.
Diversification Opportunities for Diageo PLC and VinFast Auto
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Diageo and VinFast is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Diageo PLC ADR and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Diageo PLC 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 Diageo PLC ADR are associated (or correlated) with VinFast Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VinFast Auto has no effect on the direction of Diageo PLC i.e., Diageo PLC and VinFast Auto go up and down completely randomly.
Pair Corralation between Diageo PLC and VinFast Auto
Considering the 90-day investment horizon Diageo PLC ADR is expected to under-perform the VinFast Auto. But the stock apears to be less risky and, when comparing its historical volatility, Diageo PLC ADR is 4.13 times less risky than VinFast Auto. The stock trades about -0.05 of its potential returns per unit of risk. The VinFast Auto Ltd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 535.00 in VinFast Auto Ltd on November 3, 2024 and sell it today you would lose (145.00) from holding VinFast Auto Ltd or give up 27.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diageo PLC ADR vs. VinFast Auto Ltd
Performance |
| Timeline |
| Diageo PLC ADR |
| VinFast Auto |
Diageo PLC and VinFast Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diageo PLC and VinFast Auto
The main advantage of trading using opposite Diageo PLC and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diageo PLC position performs unexpectedly, VinFast Auto 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 VinFast Auto will offset losses from the drop in VinFast Auto's long position.| Diageo PLC vs. Brown Forman | Diageo PLC vs. MGP Ingredients | Diageo PLC vs. Brown Forman | Diageo PLC vs. Constellation Brands Class |
| VinFast Auto vs. RadNet Inc | VinFast Auto vs. Chart Industries | VinFast Auto vs. Spyre Therapeutics | VinFast Auto vs. EMCOR Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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