Correlation Between VinFast Auto and GreenPower

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

Diversification Opportunities for VinFast Auto and GreenPower

0.0

Correlation Coefficient

VinFast Auto  GreenPower

Pay attention - limited upside

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

Pair Corralation between VinFast Auto and GreenPower

Considering the 90-day investment horizon VinFast Auto is expected to generate 1.66 times less return on investment than GreenPower. But when comparing it to its historical volatility, VinFast Auto Ltd is 2.48 times less risky than GreenPower. It trades about 0.09 of its potential returns per unit of risk. GreenPower Motor is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  87.00  in GreenPower Motor on September 4, 2024 and sell it today you would earn a total of  10.00  from holding GreenPower Motor or generate 11.49% return on investment over 90 days.

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

VinFast Auto Ltd  vs.  GreenPower Motor

VinFast Auto

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VinFast Auto Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, VinFast Auto unveiled solid returns over the last few months and may actually be approaching a breakup point.

GreenPower Motor

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GreenPower Motor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, GreenPower reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VinFast Auto and GreenPower

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

The idea behind VinFast Auto Ltd and GreenPower Motor 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 Commodity Directory module to find actively traded commodities issued by global exchanges.