Correlation Between Pintec Technology and Kaiser Aluminum

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

Diversification Opportunities for Pintec Technology and Kaiser Aluminum

-0.01

Correlation Coefficient

Pintec Technology  Kaiser Aluminum

Good diversification

The 3 months correlation between Pintec and Kaiser is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Pintec Technology i.e., Pintec Technology and Kaiser Aluminum go up and down completely randomly.

Pair Corralation between Pintec Technology and Kaiser Aluminum

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 1.75 times more return on investment than Kaiser Aluminum. However, Pintec Technology is 1.75 times more volatile than Kaiser Aluminum. It trades about 0.04 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.13 per unit of risk. If you would invest  97.00  in Pintec Technology Holdings on December 1, 2024 and sell it today you would earn a total of  4.00  from holding Pintec Technology Holdings or generate 4.12% 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.  Kaiser Aluminum

Pintec Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Pintec Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kaiser Aluminum

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pintec Technology and Kaiser Aluminum

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

The idea behind Pintec Technology Holdings and Kaiser Aluminum 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.