Correlation Between Pintec Technology and Houlihan Lokey

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

Diversification Opportunities for Pintec Technology and Houlihan Lokey

-0.14

Correlation Coefficient

Pintec Technology  Houlihan Lokey

Good diversification

The 3 months correlation between Pintec and Houlihan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Houlihan Lokey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houlihan Lokey 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 Houlihan Lokey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Houlihan Lokey has no effect on the direction of Pintec Technology i.e., Pintec Technology and Houlihan Lokey go up and down completely randomly.

Pair Corralation between Pintec Technology and Houlihan Lokey

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 1.31 times more return on investment than Houlihan Lokey. However, Pintec Technology is 1.31 times more volatile than Houlihan Lokey. It trades about 0.12 of its potential returns per unit of risk. Houlihan Lokey is currently generating about -0.06 per unit of risk. If you would invest  90.00  in Pintec Technology Holdings on December 29, 2024 and sell it today you would earn a total of  15.00  from holding Pintec Technology Holdings or generate 16.67% 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.  Houlihan Lokey

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 9 (%) 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.

Houlihan Lokey

Risk-Adjusted Performance

Very Weak

Over the last 90 days Houlihan Lokey has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Pintec Technology and Houlihan Lokey

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

The idea behind Pintec Technology Holdings and Houlihan Lokey 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.