Correlation Between VinFast Auto and Ford
Can any of the company-specific risk be diversified away by investing in both VinFast Auto and Ford 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 Ford 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 Ford Motor, you can compare the effects of market volatilities on VinFast Auto and Ford 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 Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinFast Auto and Ford.
Diversification Opportunities for VinFast Auto and Ford
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VinFast and Ford is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor 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 Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of VinFast Auto i.e., VinFast Auto and Ford go up and down completely randomly.
Pair Corralation between VinFast Auto and Ford
Assuming the 90 days horizon VinFast Auto Ltd is expected to generate 7.9 times more return on investment than Ford. However, VinFast Auto is 7.9 times more volatile than Ford Motor. It trades about 0.08 of its potential returns per unit of risk. Ford Motor is currently generating about 0.02 per unit of risk. If you would invest 31.00 in VinFast Auto Ltd on January 29, 2024 and sell it today you would earn a total of 13.00 from holding VinFast Auto Ltd or generate 41.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 57.74% |
Values | Daily Returns |
VinFast Auto Ltd vs. Ford Motor
Performance |
Timeline |
VinFast Auto |
Ford Motor |
VinFast Auto and Ford Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VinFast Auto and Ford
The main advantage of trading using opposite VinFast Auto and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinFast Auto position performs unexpectedly, Ford 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 Ford will offset losses from the drop in Ford's long position.VinFast Auto vs. PACCAR Inc | VinFast Auto vs. BOS Better Online | VinFast Auto vs. ZhongAn Online P | VinFast Auto vs. Marine Products |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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