Correlation Between United States and VinFast Auto

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

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

Diversification Opportunities for United States and VinFast Auto

-0.27

Correlation Coefficient

United States  VinFast Auto

Very good diversification

The 3 months correlation between United and VinFast is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and United States 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 United States Steel 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 United States i.e., United States and VinFast Auto go up and down completely randomly.

Pair Corralation between United States and VinFast Auto

Taking into account the 90-day investment horizon United States Steel is expected to under-perform the VinFast Auto. In addition to that, United States is 1.18 times more volatile than VinFast Auto Ltd. It trades about -0.15 of its total potential returns per unit of risk. VinFast Auto Ltd is currently generating about -0.17 per unit of volatility. If you would invest  497.00  in VinFast Auto Ltd on October 10, 2024 and sell it today you would lose (69.00) from holding VinFast Auto Ltd or give up 13.88% of portfolio value over 90 days.

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

United States Steel  vs.  VinFast Auto Ltd

United States Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United States Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, United States is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 unfluctuating 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 United States and VinFast Auto

The main advantage of trading using opposite United States and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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 United States Steel 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.