Correlation Between Pintec Technology and Alliant Energy

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

Diversification Opportunities for Pintec Technology and Alliant Energy

0.16

Correlation Coefficient

Pintec Technology  Alliant Energy

Average diversification

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

Pair Corralation between Pintec Technology and Alliant Energy

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the Alliant Energy. In addition to that, Pintec Technology is 5.04 times more volatile than Alliant Energy Corp. It trades about -0.11 of its total potential returns per unit of risk. Alliant Energy Corp is currently generating about -0.4 per unit of volatility. If you would invest  6,223  in Alliant Energy Corp on September 21, 2024 and sell it today you would lose (397.00) from holding Alliant Energy Corp or give up 6.38% of portfolio value over 90 days.

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

Pintec Technology Holdings  vs.  Alliant Energy Corp

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.

Alliant Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliant Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alliant Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pintec Technology and Alliant Energy

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

The idea behind Pintec Technology Holdings and Alliant Energy Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.