Correlation Between NI Holdings and VinFast Auto

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

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

Diversification Opportunities for NI Holdings and VinFast Auto

0.72

Correlation Coefficient

NI Holdings  VinFast Auto

Poor diversification

The 3 months correlation between NODK and VinFast is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and NI Holdings 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 NI Holdings 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 NI Holdings i.e., NI Holdings and VinFast Auto go up and down completely randomly.

Pair Corralation between NI Holdings and VinFast Auto

Given the investment horizon of 90 days NI Holdings is expected to under-perform the VinFast Auto. But the stock apears to be less risky and, when comparing its historical volatility, NI Holdings is 7.89 times less risky than VinFast Auto. The stock trades about -0.08 of its potential returns per unit of risk. The VinFast Auto Ltd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  42.00  in VinFast Auto Ltd on December 20, 2024 and sell it today you would lose (14.00) from holding VinFast Auto Ltd or give up 33.33% of portfolio value over 90 days.

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

NI Holdings  vs.  VinFast Auto Ltd

NI Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days NI Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional 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 fairly stable basic indicators, VinFast Auto is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with NI Holdings and VinFast Auto

The main advantage of trading using opposite NI Holdings and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings 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 NI Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.