Correlation Between Gap, and VinFast Auto

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

Diversification Opportunities for Gap, and VinFast Auto

0.7

Correlation Coefficient

Gap,  VinFast Auto

Poor diversification

The 3 months correlation between Gap, and VinFast is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Gap, 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 Gap, 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 Gap, i.e., Gap, and VinFast Auto go up and down completely randomly.

Pair Corralation between Gap, and VinFast Auto

Considering the 90-day investment horizon The Gap, is expected to under-perform the VinFast Auto. In addition to that, Gap, is 1.33 times more volatile than VinFast Auto Ltd. It trades about -0.26 of its total potential returns per unit of risk. VinFast Auto Ltd is currently generating about -0.27 per unit of volatility. If you would invest  379.00  in VinFast Auto Ltd on December 5, 2024 and sell it today you would lose (53.00) from holding VinFast Auto Ltd or give up 13.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

The Gap,  vs.  VinFast Auto Ltd

Gap,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gap, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

VinFast Auto

Risk-Adjusted Performance

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 technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gap, and VinFast Auto

The main advantage of trading using opposite Gap, and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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.

The idea behind The Gap, and VinFast Auto Ltd 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.