Correlation Between Pintec Technology and AmTrust Financial

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

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

Diversification Opportunities for Pintec Technology and AmTrust Financial

-0.16

Correlation Coefficient

Pintec Technology  AmTrust Financial

Good diversification

The 3 months correlation between Pintec and AmTrust is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and Pintec Technology 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 Pintec Technology Holdings are associated (or correlated) with AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of Pintec Technology i.e., Pintec Technology and AmTrust Financial go up and down completely randomly.

Pair Corralation between Pintec Technology and AmTrust Financial

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the AmTrust Financial. In addition to that, Pintec Technology is 1.31 times more volatile than AmTrust Financial Services. It trades about -0.05 of its total potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.07 per unit of volatility. If you would invest  1,405  in AmTrust Financial Services on October 4, 2024 and sell it today you would earn a total of  45.00  from holding AmTrust Financial Services or generate 3.2% return on investment over 90 days.

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

Pintec Technology Holdings  vs.  AmTrust Financial Services

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

AmTrust Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AmTrust Financial Services are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, AmTrust Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pintec Technology and AmTrust Financial

The main advantage of trading using opposite Pintec Technology and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.

The idea behind Pintec Technology Holdings and AmTrust Financial Services 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.