Correlation Between VinFast Auto and Dongfang ElectricLimited

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

Diversification Opportunities for VinFast Auto and Dongfang ElectricLimited

0.0

Correlation Coefficient

VinFast Auto  Dongfang ElectricLimited

Pay attention - limited upside

The 3 months correlation between VinFast and Dongfang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and Dongfang Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongfang ElectricLimited 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 Dongfang ElectricLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongfang ElectricLimited has no effect on the direction of VinFast Auto i.e., VinFast Auto and Dongfang ElectricLimited go up and down completely randomly.

Pair Corralation between VinFast Auto and Dongfang ElectricLimited

If you would invest  1,045  in VinFast Auto Ltd on March 22, 2024 and sell it today you would lose (653.00) from holding VinFast Auto Ltd or give up 62.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

VinFast Auto Ltd  vs.  Dongfang Electric

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 comparatively stable technical and fundamental indicators, VinFast Auto is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Dongfang ElectricLimited

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Dongfang Electric has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Dongfang ElectricLimited is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with VinFast Auto and Dongfang ElectricLimited

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

The idea behind VinFast Auto Ltd and Dongfang Electric 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.