Correlation Between GE Vernova and VinFast Auto

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

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

Diversification Opportunities for GE Vernova and VinFast Auto

0.49

Correlation Coefficient

GE Vernova  VinFast Auto

Very weak diversification

The 3 months correlation between GEV and VinFast is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GE Vernova LLC and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and GE Vernova 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 GE Vernova LLC 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 GE Vernova i.e., GE Vernova and VinFast Auto go up and down completely randomly.

Pair Corralation between GE Vernova and VinFast Auto

Considering the 90-day investment horizon GE Vernova LLC is expected to generate 0.38 times more return on investment than VinFast Auto. However, GE Vernova LLC is 2.63 times less risky than VinFast Auto. It trades about 0.01 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  33,255  in GE Vernova LLC on December 19, 2024 and sell it today you would lose (1,362) from holding GE Vernova LLC or give up 4.1% of portfolio value over 90 days.

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

GE Vernova LLC  vs.  VinFast Auto Ltd

GE Vernova LLC

Risk-Adjusted Performance

Insignificant

Over the last 90 days GE Vernova LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, GE Vernova is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated 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 fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with GE Vernova and VinFast Auto

The main advantage of trading using opposite GE Vernova and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE Vernova 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 GE Vernova LLC 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.