Correlation Between GEN Restaurant and VinFast Auto

Can any of the company-specific risk be diversified away by investing in both GEN Restaurant 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 GEN Restaurant and VinFast Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GEN Restaurant Group, and VinFast Auto Ltd, you can compare the effects of market volatilities on GEN Restaurant 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 GEN Restaurant with a short position of VinFast Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and VinFast Auto.

Diversification Opportunities for GEN Restaurant and VinFast Auto

-0.34

Correlation Coefficient

GEN Restaurant  VinFast Auto

Very good diversification

The 3 months correlation between GEN and VinFast is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and GEN Restaurant 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 GEN Restaurant Group, 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 GEN Restaurant i.e., GEN Restaurant and VinFast Auto go up and down completely randomly.

Pair Corralation between GEN Restaurant and VinFast Auto

Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 3.07 times more return on investment than VinFast Auto. However, GEN Restaurant is 3.07 times more volatile than VinFast Auto Ltd. It trades about 0.05 of its potential returns per unit of risk. VinFast Auto Ltd is currently generating about 0.03 per unit of risk. If you would invest  0.00  in GEN Restaurant Group, on October 11, 2024 and sell it today you would earn a total of  757.00  from holding GEN Restaurant Group, or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.73%
Values	Daily Returns

GEN Restaurant Group,  vs.  VinFast Auto Ltd

GEN Restaurant Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GEN Restaurant Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, GEN Restaurant is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

VinFast Auto

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VinFast Auto Ltd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, VinFast Auto unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GEN Restaurant and VinFast Auto

The main advantage of trading using opposite GEN Restaurant and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant 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 GEN Restaurant Group, 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.