Correlation Between Tesla and VinFast Auto

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

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

Diversification Opportunities for Tesla and VinFast Auto

0.52

Correlation Coefficient

Tesla  VinFast Auto

Very weak diversification

The 3 months correlation between Tesla and VinFast is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tesla 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 Tesla 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 Tesla 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 Tesla i.e., Tesla and VinFast Auto go up and down completely randomly.

Pair Corralation between Tesla and VinFast Auto

Given the investment horizon of 90 days Tesla Inc is expected to generate 1.14 times more return on investment than VinFast Auto. However, Tesla is 1.14 times more volatile than VinFast Auto Ltd. 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  17,748  in Tesla Inc on September 5, 2024 and sell it today you would earn a total of  17,394  from holding Tesla Inc or generate 98.01% return on investment over 90 days.

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

Tesla Inc  vs.  VinFast Auto Ltd

Tesla Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tesla Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady essential indicators, Tesla sustained solid returns over the last few months and may actually be approaching a breakup point.

VinFast Auto

Risk-Adjusted Performance

4 of 100

Modest

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 unsteady technical and fundamental indicators, VinFast Auto may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tesla and VinFast Auto

The main advantage of trading using opposite Tesla and VinFast Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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 Tesla 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.