Correlation Between Stoneridge and VinFast Auto

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

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

Diversification Opportunities for Stoneridge and VinFast Auto

-0.52

Correlation Coefficient

Stoneridge  VinFast Auto

Excellent diversification

The 3 months correlation between Stoneridge and VinFast is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and VinFast Auto Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinFast Auto and Stoneridge 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 Stoneridge 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 Stoneridge i.e., Stoneridge and VinFast Auto go up and down completely randomly.

Pair Corralation between Stoneridge and VinFast Auto

Considering the 90-day investment horizon Stoneridge is expected to under-perform the VinFast Auto. In addition to that, Stoneridge is 1.33 times more volatile than VinFast Auto Ltd. It trades about -0.23 of its total potential returns per unit of risk. VinFast Auto Ltd is currently generating about 0.1 per unit of volatility. If you would invest  351.00  in VinFast Auto Ltd on September 1, 2024 and sell it today you would earn a total of  64.00  from holding VinFast Auto Ltd or generate 18.23% return on investment over 90 days.

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

Stoneridge  vs.  VinFast Auto Ltd

Stoneridge

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stoneridge has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

VinFast Auto

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VinFast Auto Ltd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile 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 Stoneridge and VinFast Auto

The main advantage of trading using opposite Stoneridge and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge 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 Stoneridge 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.