Correlation Between VinFast Auto and Volcon

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

Diversification Opportunities for VinFast Auto and Volcon

0.86

Correlation Coefficient

VinFast Auto  Volcon

Very poor diversification

The 3 months correlation between VinFast and Volcon is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and Volcon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcon Inc 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 Volcon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcon Inc has no effect on the direction of VinFast Auto i.e., VinFast Auto and Volcon go up and down completely randomly.

Pair Corralation between VinFast Auto and Volcon

Considering the 90-day investment horizon VinFast Auto Ltd is expected to generate 0.41 times more return on investment than Volcon. However, VinFast Auto Ltd is 2.43 times less risky than Volcon. It trades about -0.11 of its potential returns per unit of risk. Volcon Inc is currently generating about -0.26 per unit of risk. If you would invest  421.00  in VinFast Auto Ltd on December 21, 2024 and sell it today you would lose (89.00) from holding VinFast Auto Ltd or give up 21.14% of portfolio value over 90 days.

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

VinFast Auto Ltd  vs.  Volcon Inc

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.

Volcon Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volcon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with VinFast Auto and Volcon

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

The idea behind VinFast Auto Ltd and Volcon Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.