Correlation Between ECD Automotive and VinFast Auto
Can any of the company-specific risk be diversified away by investing in both ECD Automotive 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 ECD Automotive and VinFast Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECD Automotive Design and VinFast Auto Ltd, you can compare the effects of market volatilities on ECD Automotive 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 ECD Automotive with a short position of VinFast Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECD Automotive and VinFast Auto.
Diversification Opportunities for ECD Automotive and VinFast Auto
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ECD and VinFast is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ECD Automotive Design and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and ECD Automotive 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 ECD Automotive Design 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 ECD Automotive i.e., ECD Automotive and VinFast Auto go up and down completely randomly.
Pair Corralation between ECD Automotive and VinFast Auto
Given the investment horizon of 90 days ECD Automotive Design is expected to generate 1.51 times more return on investment than VinFast Auto. However, ECD Automotive is 1.51 times more volatile than VinFast Auto Ltd. It trades about 0.0 of its potential returns per unit of risk. VinFast Auto Ltd is currently generating about -0.03 per unit of risk. If you would invest 115.00 in ECD Automotive Design on August 28, 2024 and sell it today you would lose (20.00) from holding ECD Automotive Design or give up 17.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
ECD Automotive Design vs. VinFast Auto Ltd
Performance |
| Timeline |
| ECD Automotive Design |
| VinFast Auto |
ECD Automotive and VinFast Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECD Automotive and VinFast Auto
The main advantage of trading using opposite ECD Automotive and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECD Automotive 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.| ECD Automotive vs. Artisan Partners Asset | ECD Automotive vs. Univest Pennsylvania | ECD Automotive vs. LithiumBank Resources Corp | ECD Automotive vs. KeyCorp |
| VinFast Auto vs. Tesla Inc | VinFast Auto vs. Mullen Automotive | VinFast Auto vs. BYD Company Limited | VinFast Auto vs. Ford Motor |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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