Correlation Between Lion Financial and Pintec Technology

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

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

Diversification Opportunities for Lion Financial and Pintec Technology

-0.23

Correlation Coefficient

Lion Financial  Pintec Technology

Very good diversification

The 3 months correlation between Lion and Pintec is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lion Financial Group and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Lion Financial 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 Lion Financial Group 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 Lion Financial i.e., Lion Financial and Pintec Technology go up and down completely randomly.

Pair Corralation between Lion Financial and Pintec Technology

Assuming the 90 days horizon Lion Financial is expected to generate 3.81 times less return on investment than Pintec Technology. In addition to that, Lion Financial is 2.83 times more volatile than Pintec Technology Holdings. It trades about 0.01 of its total potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.09 per unit of volatility. If you would invest  91.00  in Pintec Technology Holdings on December 27, 2024 and sell it today you would earn a total of  11.00  from holding Pintec Technology Holdings or generate 12.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Lion Financial Group  vs.  Pintec Technology Holdings

Lion Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lion Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Lion Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 7 (%) 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 Lion Financial and Pintec Technology

The main advantage of trading using opposite Lion Financial and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Financial 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 Lion Financial Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.