Correlation Between Global E and VinFast Auto
Can any of the company-specific risk be diversified away by investing in both Global E 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 Global E and VinFast Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and VinFast Auto Ltd, you can compare the effects of market volatilities on Global E 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 Global E with a short position of VinFast Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and VinFast Auto.
Diversification Opportunities for Global E and VinFast Auto
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and VinFast is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Global E 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 Global E Online 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 Global E i.e., Global E and VinFast Auto go up and down completely randomly.
Pair Corralation between Global E and VinFast Auto
Given the investment horizon of 90 days Global E Online is expected to under-perform the VinFast Auto. But the stock apears to be less risky and, when comparing its historical volatility, Global E Online is 1.38 times less risky than VinFast Auto. The stock trades about -0.02 of its potential returns per unit of risk. The VinFast Auto Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 23.00 in VinFast Auto Ltd on January 12, 2025 and sell it today you would earn a total of 3.00 from holding VinFast Auto Ltd or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Online vs. VinFast Auto Ltd
Performance |
| Timeline |
| Global E Online |
| VinFast Auto |
Global E and VinFast Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and VinFast Auto
The main advantage of trading using opposite Global E and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E 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.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| VinFast Auto vs. The Coca Cola | VinFast Auto vs. Philip Morris International | VinFast Auto vs. RLX Technology | VinFast Auto vs. Boston Beer |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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