Correlation Between Toyota and VinFast Auto
Can any of the company-specific risk be diversified away by investing in both Toyota 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 Toyota and VinFast Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toyota Motor and VinFast Auto Ltd, you can compare the effects of market volatilities on Toyota 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 Toyota with a short position of VinFast Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toyota and VinFast Auto.
Diversification Opportunities for Toyota and VinFast Auto
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Toyota and VinFast is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Toyota Motor and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Toyota 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 Toyota Motor 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 Toyota i.e., Toyota and VinFast Auto go up and down completely randomly.
Pair Corralation between Toyota and VinFast Auto
Allowing for the 90-day total investment horizon Toyota is expected to generate 12.26 times less return on investment than VinFast Auto. But when comparing it to its historical volatility, Toyota Motor is 10.87 times less risky than VinFast Auto. It trades about 0.03 of its potential returns per unit of risk. VinFast Auto Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,045 in VinFast Auto Ltd on August 28, 2024 and sell it today you would lose (652.00) from holding VinFast Auto Ltd or give up 62.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.81% |
| Values | Daily Returns |
Toyota Motor vs. VinFast Auto Ltd
Performance |
| Timeline |
| Toyota Motor |
| VinFast Auto |
Toyota and VinFast Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toyota and VinFast Auto
The main advantage of trading using opposite Toyota and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toyota 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.The idea behind Toyota Motor and VinFast Auto Ltd 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.| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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