Correlation Between Pintec Technology and IPG Photonics

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

Diversification Opportunities for Pintec Technology and IPG Photonics

-0.51

Correlation Coefficient

Pintec Technology  IPG Photonics

Excellent diversification

The 3 months correlation between Pintec and IPG is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and IPG Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPG Photonics 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 IPG Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPG Photonics has no effect on the direction of Pintec Technology i.e., Pintec Technology and IPG Photonics go up and down completely randomly.

Pair Corralation between Pintec Technology and IPG Photonics

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 1.0 times more return on investment than IPG Photonics. However, Pintec Technology is 1.0 times more volatile than IPG Photonics. It trades about 0.07 of its potential returns per unit of risk. IPG Photonics is currently generating about -0.07 per unit of risk. If you would invest  90.00  in Pintec Technology Holdings on December 19, 2024 and sell it today you would earn a total of  8.00  from holding Pintec Technology Holdings or generate 8.89% return on investment over 90 days.

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

Pintec Technology Holdings  vs.  IPG Photonics

Pintec Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Pintec Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

IPG Photonics

Risk-Adjusted Performance

Very Weak

Over the last 90 days IPG Photonics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Pintec Technology and IPG Photonics

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

The idea behind Pintec Technology Holdings and IPG Photonics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.