Correlation Between Xpeng and VinFast Auto

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

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

Diversification Opportunities for Xpeng and VinFast Auto

-0.42

Correlation Coefficient

Xpeng  VinFast Auto

Very good diversification

The 3 months correlation between Xpeng and VinFast is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Xpeng Inc and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Xpeng 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 Xpeng Inc 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 Xpeng i.e., Xpeng and VinFast Auto go up and down completely randomly.

Pair Corralation between Xpeng and VinFast Auto

Given the investment horizon of 90 days Xpeng Inc is expected to generate 0.89 times more return on investment than VinFast Auto. However, Xpeng Inc is 1.12 times less risky than VinFast Auto. It trades about 0.15 of its potential returns per unit of risk. VinFast Auto Ltd is currently generating about 0.0 per unit of risk. If you would invest  843.00  in Xpeng Inc on September 4, 2024 and sell it today you would earn a total of  426.00  from holding Xpeng Inc or generate 50.53% return on investment over 90 days.

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

Xpeng Inc  vs.  VinFast Auto Ltd

Xpeng Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xpeng Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Xpeng showed solid returns over the last few months and may actually be approaching a breakup point.

VinFast Auto

Risk-Adjusted Performance

0 of 100

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 current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Xpeng and VinFast Auto

The main advantage of trading using opposite Xpeng and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xpeng 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 Xpeng Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.