Correlation Between Mill City and Pintec Technology

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

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

Diversification Opportunities for Mill City and Pintec Technology

0.59

Correlation Coefficient

Mill City  Pintec Technology

Very weak diversification

The 3 months correlation between Mill and Pintec is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Mill City 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 Mill City Ventures 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 Mill City i.e., Mill City and Pintec Technology go up and down completely randomly.

Pair Corralation between Mill City and Pintec Technology

Given the investment horizon of 90 days Mill City Ventures is expected to generate 32.72 times more return on investment than Pintec Technology. However, Mill City is 32.72 times more volatile than Pintec Technology Holdings. It trades about 0.08 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about -0.03 per unit of risk. If you would invest  285.00  in Mill City Ventures on September 14, 2024 and sell it today you would lose (92.37) from holding Mill City Ventures or give up 32.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	91.82%
Values	Daily Returns

Mill City Ventures  vs.  Pintec Technology Holdings

Mill City Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mill City Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mill City and Pintec Technology

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