Correlation Between VinFast Auto and KB Financial

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

Diversification Opportunities for VinFast Auto and KB Financial

-0.16

Correlation Coefficient

VinFast Auto  KB Financial

Good diversification

The 3 months correlation between VinFast and KB Financial is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding VinFast Auto Ltd and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group 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 KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of VinFast Auto i.e., VinFast Auto and KB Financial go up and down completely randomly.

Pair Corralation between VinFast Auto and KB Financial

Considering the 90-day investment horizon VinFast Auto Ltd is expected to under-perform the KB Financial. In addition to that, VinFast Auto is 1.51 times more volatile than KB Financial Group. It trades about -0.58 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.13 per unit of volatility. If you would invest  5,072  in KB Financial Group on January 29, 2024 and sell it today you would earn a total of  394.00  from holding KB Financial Group or generate 7.77% return on investment over 90 days.

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

VinFast Auto Ltd  vs.  KB Financial Group

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 unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

KB Financial Group

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with VinFast Auto and KB Financial

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

The idea behind VinFast Auto Ltd and KB Financial Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.