Correlation Between Wendys and VinFast Auto
Can any of the company-specific risk be diversified away by investing in both Wendys and VinFast Auto 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 Wendys and VinFast Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Wendys Co and VinFast Auto Ltd, you can compare the effects of market volatilities on Wendys and VinFast Auto 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 Wendys with a short position of VinFast Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendys and VinFast Auto.
Diversification Opportunities for Wendys and VinFast Auto
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wendys and VinFast is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding The Wendys Co and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Wendys 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 The Wendys Co are associated (or correlated) with VinFast Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VinFast Auto has no effect on the direction of Wendys i.e., Wendys and VinFast Auto go up and down completely randomly.
Pair Corralation between Wendys and VinFast Auto
Considering the 90-day investment horizon The Wendys Co is expected to generate 0.26 times more return on investment than VinFast Auto. However, The Wendys Co is 3.88 times less risky than VinFast Auto. It trades about -0.05 of its potential returns per unit of risk. VinFast Auto Ltd is currently generating about -0.07 per unit of risk. If you would invest 1,876 in The Wendys Co on February 14, 2024 and sell it today you would lose (40.00) from holding The Wendys Co or give up 2.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Wendys Co vs. VinFast Auto Ltd
Performance |
Timeline |
The Wendys |
VinFast Auto |
Wendys and VinFast Auto Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wendys and VinFast Auto
The main advantage of trading using opposite Wendys and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendys position performs unexpectedly, VinFast Auto 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 VinFast Auto will offset losses from the drop in VinFast Auto's long position.Wendys vs. Chanson International Holding | Wendys vs. TH International Limited | Wendys vs. Flanigans Enterprises | Wendys vs. Alsea SAB de |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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