Correlation Between Distoken Acquisition and Pintec Technology

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

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

Diversification Opportunities for Distoken Acquisition and Pintec Technology

0.09

Correlation Coefficient

Distoken Acquisition  Pintec Technology

Significant diversification

The 3 months correlation between Distoken and Pintec is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Distoken Acquisition and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Distoken Acquisition 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 Distoken Acquisition 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 Distoken Acquisition i.e., Distoken Acquisition and Pintec Technology go up and down completely randomly.

Pair Corralation between Distoken Acquisition and Pintec Technology

Assuming the 90 days horizon Distoken Acquisition is expected to generate 9.88 times more return on investment than Pintec Technology. However, Distoken Acquisition is 9.88 times more volatile than Pintec Technology Holdings. It trades about 0.14 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.12 per unit of risk. If you would invest  12.00  in Distoken Acquisition on December 29, 2024 and sell it today you would earn a total of  4.00  from holding Distoken Acquisition or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	40.98%
Values	Daily Returns

Distoken Acquisition  vs.  Pintec Technology Holdings

Distoken Acquisition

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Distoken Acquisition are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Distoken Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pintec Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Pintec Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Distoken Acquisition and Pintec Technology

The main advantage of trading using opposite Distoken Acquisition and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distoken Acquisition 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 Distoken Acquisition 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.