Correlation Between VinFast Auto and Ethema Health
Can any of the company-specific risk be diversified away by investing in both VinFast Auto and Ethema Health 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 Ethema Health 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 Ethema Health Corp, you can compare the effects of market volatilities on VinFast Auto and Ethema Health 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 Ethema Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinFast Auto and Ethema Health.
Diversification Opportunities for VinFast Auto and Ethema Health
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VinFast and Ethema is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and Ethema Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethema Health Corp 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 Ethema Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethema Health Corp has no effect on the direction of VinFast Auto i.e., VinFast Auto and Ethema Health go up and down completely randomly.
Pair Corralation between VinFast Auto and Ethema Health
Assuming the 90 days horizon VinFast Auto Ltd is expected to generate 1.25 times more return on investment than Ethema Health. However, VinFast Auto is 1.25 times more volatile than Ethema Health Corp. It trades about 0.09 of its potential returns per unit of risk. Ethema Health Corp is currently generating about 0.08 per unit of risk. If you would invest 3.31 in VinFast Auto Ltd on August 30, 2024 and sell it today you would earn a total of 34.69 from holding VinFast Auto Ltd or generate 1048.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.45% |
| Values | Daily Returns |
VinFast Auto Ltd vs. Ethema Health Corp
Performance |
| Timeline |
| VinFast Auto |
| Ethema Health Corp |
VinFast Auto and Ethema Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VinFast Auto and Ethema Health
The main advantage of trading using opposite VinFast Auto and Ethema Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinFast Auto position performs unexpectedly, Ethema Health 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 Ethema Health will offset losses from the drop in Ethema Health's long position.| VinFast Auto vs. NETGEAR | VinFast Auto vs. Zedge Inc | VinFast Auto vs. ArcelorMittal SA ADR | VinFast Auto vs. Integral Ad Science |
| Ethema Health vs. PayPal Holdings | Ethema Health vs. Nasdaq Inc | Ethema Health vs. Choice Hotels International | Ethema Health vs. Microsoft |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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