Correlation Between Pintec Technology and Azul SA

Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Azul SA 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 Azul SA 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 Azul SA, you can compare the effects of market volatilities on Pintec Technology and Azul SA 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 Azul SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Azul SA.

Diversification Opportunities for Pintec Technology and Azul SA

0.36

Correlation Coefficient

Pintec Technology  Azul SA

Weak diversification

The 3 months correlation between Pintec and Azul is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Azul SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azul SA 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 Azul SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azul SA has no effect on the direction of Pintec Technology i.e., Pintec Technology and Azul SA go up and down completely randomly.

Pair Corralation between Pintec Technology and Azul SA

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 0.53 times more return on investment than Azul SA. However, Pintec Technology Holdings is 1.88 times less risky than Azul SA. It trades about -0.02 of its potential returns per unit of risk. Azul SA is currently generating about -0.12 per unit of risk. If you would invest  108.00  in Pintec Technology Holdings on September 20, 2024 and sell it today you would lose (18.00) from holding Pintec Technology Holdings or give up 16.67% of portfolio value over 90 days.

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

Pintec Technology Holdings  vs.  Azul SA

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.

Azul SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Azul SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Pintec Technology and Azul SA

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

The idea behind Pintec Technology Holdings and Azul SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..