Correlation Between Vita Coco and Pintec Technology

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

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

Diversification Opportunities for Vita Coco and Pintec Technology

-0.38

Correlation Coefficient

Vita Coco  Pintec Technology

Very good diversification

The 3 months correlation between Vita and Pintec is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Vita Coco 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 Vita Coco 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 Vita Coco i.e., Vita Coco and Pintec Technology go up and down completely randomly.

Pair Corralation between Vita Coco and Pintec Technology

Given the investment horizon of 90 days Vita Coco is expected to under-perform the Pintec Technology. But the stock apears to be less risky and, when comparing its historical volatility, Vita Coco is 1.98 times less risky than Pintec Technology. The stock trades about -0.18 of its potential returns per unit of risk. The Pintec Technology Holdings is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  103.00  in Pintec Technology Holdings on October 8, 2024 and sell it today you would lose (5.00) from holding Pintec Technology Holdings or give up 4.85% of portfolio value over 90 days.

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

Vita Coco  vs.  Pintec Technology Holdings

Vita Coco

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.

Pintec Technology

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Pintec Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Vita Coco and Pintec Technology

The main advantage of trading using opposite Vita Coco and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco 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 Vita Coco 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.