Correlation Between Kaiser Aluminum and Pintec Technology

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

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

Diversification Opportunities for Kaiser Aluminum and Pintec Technology

-0.51

Correlation Coefficient

Kaiser Aluminum  Pintec Technology

Excellent diversification

The 3 months correlation between Kaiser and Pintec is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum i.e., Kaiser Aluminum and Pintec Technology go up and down completely randomly.

Pair Corralation between Kaiser Aluminum and Pintec Technology

Given the investment horizon of 90 days Kaiser Aluminum is expected to generate 0.63 times more return on investment than Pintec Technology. However, Kaiser Aluminum is 1.59 times less risky than Pintec Technology. It trades about 0.11 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.0 per unit of risk. If you would invest  6,958  in Kaiser Aluminum on September 3, 2024 and sell it today you would earn a total of  1,170  from holding Kaiser Aluminum or generate 16.82% return on investment over 90 days.

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

Kaiser Aluminum  vs.  Pintec Technology Holdings

Kaiser Aluminum

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kaiser Aluminum are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, Kaiser Aluminum unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pintec Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pintec Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pintec Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kaiser Aluminum and Pintec Technology

The main advantage of trading using opposite Kaiser Aluminum and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum 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 Kaiser Aluminum 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.