Correlation Between VinFast Auto and Zoetis

Can any of the company-specific risk be diversified away by investing in both VinFast Auto and Zoetis 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 Zoetis 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 Zoetis Inc, you can compare the effects of market volatilities on VinFast Auto and Zoetis 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 Zoetis. Check out your portfolio center. Please also check ongoing floating volatility patterns of VinFast Auto and Zoetis.

Diversification Opportunities for VinFast Auto and Zoetis

0.47

Correlation Coefficient

VinFast Auto  Zoetis

Very weak diversification

The 3 months correlation between VinFast and Zoetis is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and Zoetis Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoetis Inc 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 Zoetis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoetis Inc has no effect on the direction of VinFast Auto i.e., VinFast Auto and Zoetis go up and down completely randomly.

Pair Corralation between VinFast Auto and Zoetis

Assuming the 90 days horizon VinFast Auto Ltd is expected to generate 13.26 times more return on investment than Zoetis. However, VinFast Auto is 13.26 times more volatile than Zoetis Inc. It trades about 0.1 of its potential returns per unit of risk. Zoetis Inc is currently generating about 0.02 per unit of risk. If you would invest  11.00  in VinFast Auto Ltd on March 14, 2024 and sell it today you would earn a total of  34.00  from holding VinFast Auto Ltd or generate 309.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	69.35%
Values	Daily Returns

VinFast Auto Ltd  vs.  Zoetis Inc

VinFast Auto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VinFast Auto Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in July 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Zoetis Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zoetis Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Zoetis is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with VinFast Auto and Zoetis

The main advantage of trading using opposite VinFast Auto and Zoetis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinFast Auto position performs unexpectedly, Zoetis 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 Zoetis will offset losses from the drop in Zoetis' long position.

The idea behind VinFast Auto Ltd and Zoetis Inc 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.