Correlation Between VinFast Auto and BYD Company
Can any of the company-specific risk be diversified away by investing in both VinFast Auto and BYD Company 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 VinFast Auto and BYD Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VinFast Auto Ltd and BYD Company Limited, you can compare the effects of market volatilities on VinFast Auto and BYD Company 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 VinFast Auto with a short position of BYD Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinFast Auto and BYD Company.
Diversification Opportunities for VinFast Auto and BYD Company
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VinFast and BYD is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and BYD Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Limited and VinFast Auto 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 VinFast Auto Ltd are associated (or correlated) with BYD Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Limited has no effect on the direction of VinFast Auto i.e., VinFast Auto and BYD Company go up and down completely randomly.
Pair Corralation between VinFast Auto and BYD Company
Assuming the 90 days horizon VinFast Auto Ltd is expected to generate 8.66 times more return on investment than BYD Company. However, VinFast Auto is 8.66 times more volatile than BYD Company Limited. It trades about 0.09 of its potential returns per unit of risk. BYD Company Limited is currently generating about 0.04 per unit of risk. If you would invest 3.00 in VinFast Auto Ltd on August 26, 2024 and sell it today you would earn a total of 34.00 from holding VinFast Auto Ltd or generate 1133.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.91% |
| Values | Daily Returns |
VinFast Auto Ltd vs. BYD Company Limited
Performance |
| Timeline |
| VinFast Auto |
| BYD Limited |
VinFast Auto and BYD Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinFast Auto and BYD Company
The main advantage of trading using opposite VinFast Auto and BYD Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinFast Auto position performs unexpectedly, BYD Company 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 BYD Company will offset losses from the drop in BYD Company's long position.| VinFast Auto vs. Nio Class A | VinFast Auto vs. Rivian Automotive | VinFast Auto vs. Lucid Group | VinFast Auto vs. Tesla Inc |
| BYD Company vs. Li Auto | BYD Company vs. Xpeng Inc | BYD Company vs. Rivian Automotive | BYD Company vs. Nio Class A |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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