Correlation Between Bowhead Specialty and Pintec Technology

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

By analyzing existing cross correlation between Bowhead Specialty Holdings and Pintec Technology Holdings, you can compare the effects of market volatilities on Bowhead Specialty and Pintec Technology 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 Bowhead Specialty with a short position of Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and Pintec Technology.

Diversification Opportunities for Bowhead Specialty and Pintec Technology

-0.55

Correlation Coefficient

Bowhead Specialty  Pintec Technology

Excellent diversification

The 3 months correlation between Bowhead and Pintec is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with Pintec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pintec Technology has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and Pintec Technology go up and down completely randomly.

Pair Corralation between Bowhead Specialty and Pintec Technology

Considering the 90-day investment horizon Bowhead Specialty is expected to generate 1.15 times less return on investment than Pintec Technology. But when comparing it to its historical volatility, Bowhead Specialty Holdings is 1.24 times less risky than Pintec Technology. It trades about 0.08 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Pintec Technology Holdings on December 19, 2024 and sell it today you would earn a total of  8.00  from holding Pintec Technology Holdings or generate 8.89% return on investment over 90 days.

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

Bowhead Specialty Holdings  vs.  Pintec Technology Holdings

Bowhead Specialty

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bowhead Specialty Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bowhead Specialty may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pintec Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Pintec Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bowhead Specialty and Pintec Technology

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

The idea behind Bowhead Specialty Holdings and Pintec Technology Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.