Correlation Between VinFast Auto and Tesla

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

Diversification Opportunities for VinFast Auto and Tesla

0.52

Correlation Coefficient

VinFast Auto  Tesla

Very weak diversification

The 3 months correlation between VinFast and Tesla is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of VinFast Auto i.e., VinFast Auto and Tesla go up and down completely randomly.

Pair Corralation between VinFast Auto and Tesla

Considering the 90-day investment horizon VinFast Auto Ltd is expected to generate 4.57 times more return on investment than Tesla. However, VinFast Auto is 4.57 times more volatile than Tesla Inc. It trades about 0.03 of its potential returns per unit of risk. Tesla Inc is currently generating about 0.06 per unit of risk. If you would invest  1,045  in VinFast Auto Ltd on September 5, 2024 and sell it today you would lose (641.00) from holding VinFast Auto Ltd or give up 61.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	66.87%
Values	Daily Returns

VinFast Auto Ltd  vs.  Tesla Inc

VinFast Auto

Risk-Adjusted Performance

4 of 100

Insignificant

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.

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.

Pair Trading with VinFast Auto and Tesla

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

The idea behind VinFast Auto Ltd and Tesla Inc 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.