Correlation Between Emerson Electric and VinFast Auto
Can any of the company-specific risk be diversified away by investing in both Emerson Electric 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 Emerson Electric and VinFast Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Electric and VinFast Auto Ltd, you can compare the effects of market volatilities on Emerson Electric 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 Emerson Electric with a short position of VinFast Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Electric and VinFast Auto.
Diversification Opportunities for Emerson Electric and VinFast Auto
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Emerson and VinFast is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Electric and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Emerson Electric 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 Emerson Electric 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 Emerson Electric i.e., Emerson Electric and VinFast Auto go up and down completely randomly.
Pair Corralation between Emerson Electric and VinFast Auto
Considering the 90-day investment horizon Emerson Electric is expected to generate 0.44 times more return on investment than VinFast Auto. However, Emerson Electric is 2.25 times less risky than VinFast Auto. It trades about 0.23 of its potential returns per unit of risk. VinFast Auto Ltd is currently generating about -0.1 per unit of risk. If you would invest 12,218 in Emerson Electric on November 3, 2024 and sell it today you would earn a total of 777.00 from holding Emerson Electric or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Emerson Electric vs. VinFast Auto Ltd
Performance |
| Timeline |
| Emerson Electric |
| VinFast Auto |
Emerson Electric and VinFast Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Electric and VinFast Auto
The main advantage of trading using opposite Emerson Electric and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Electric 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.| Emerson Electric vs. Dover | Emerson Electric vs. Parker Hannifin | Emerson Electric vs. Pentair PLC | Emerson Electric vs. Eaton PLC |
| VinFast Auto vs. United Airlines Holdings | VinFast Auto vs. Willamette Valley Vineyards | VinFast Auto vs. Saia Inc | VinFast Auto vs. Grocery Outlet Holding |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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