Correlation Between VinFast Auto and Pacific Basin

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

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

Diversification Opportunities for VinFast Auto and Pacific Basin

-0.63

Correlation Coefficient

VinFast Auto  Pacific Basin

Excellent diversification

The 3 months correlation between VinFast and Pacific is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and Pacific Basin Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Basin Shipping and VinFast Auto 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 VinFast Auto Ltd are associated (or correlated) with Pacific Basin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Basin Shipping has no effect on the direction of VinFast Auto i.e., VinFast Auto and Pacific Basin go up and down completely randomly.

Pair Corralation between VinFast Auto and Pacific Basin

Considering the 90-day investment horizon VinFast Auto Ltd is expected to generate 3.15 times more return on investment than Pacific Basin. However, VinFast Auto is 3.15 times more volatile than Pacific Basin Shipping. It trades about 0.03 of its potential returns per unit of risk. Pacific Basin Shipping is currently generating about 0.0 per unit of risk. If you would invest  1,045  in VinFast Auto Ltd on October 11, 2024 and sell it today you would lose (631.00) from holding VinFast Auto Ltd or give up 60.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	91.53%
Values	Daily Returns

VinFast Auto Ltd  vs.  Pacific Basin Shipping

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.

Pacific Basin Shipping

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacific Basin Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with VinFast Auto and Pacific Basin

The main advantage of trading using opposite VinFast Auto and Pacific Basin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VinFast Auto position performs unexpectedly, Pacific Basin 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 Pacific Basin will offset losses from the drop in Pacific Basin's long position.

The idea behind VinFast Auto Ltd and Pacific Basin Shipping 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.