Correlation Between VinFast Auto and First Tractor
Can any of the company-specific risk be diversified away by investing in both VinFast Auto and First Tractor 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 First Tractor 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 First Tractor Co, you can compare the effects of market volatilities on VinFast Auto and First Tractor 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 First Tractor. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinFast Auto and First Tractor.
Diversification Opportunities for VinFast Auto and First Tractor
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VinFast and First is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and First Tractor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Tractor 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 First Tractor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Tractor has no effect on the direction of VinFast Auto i.e., VinFast Auto and First Tractor go up and down completely randomly.
Pair Corralation between VinFast Auto and First Tractor
Assuming the 90 days horizon VinFast Auto Ltd is expected to generate 1.99 times more return on investment than First Tractor. However, VinFast Auto is 1.99 times more volatile than First Tractor Co. It trades about 0.08 of its potential returns per unit of risk. First Tractor Co is currently generating about 0.05 per unit of risk. If you would invest 7.00 in VinFast Auto Ltd on September 3, 2024 and sell it today you would earn a total of 32.00 from holding VinFast Auto Ltd or generate 457.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.58% |
| Values | Daily Returns |
VinFast Auto Ltd vs. First Tractor Co
Performance |
| Timeline |
| VinFast Auto |
| First Tractor |
VinFast Auto and First Tractor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinFast Auto and First Tractor
The main advantage of trading using opposite VinFast Auto and First Tractor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinFast Auto position performs unexpectedly, First Tractor 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 First Tractor will offset losses from the drop in First Tractor's long position.| VinFast Auto vs. Merit Medical Systems | VinFast Auto vs. Summit Materials | VinFast Auto vs. Global E Online | VinFast Auto vs. Cardinal Health |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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