Correlation Between Pintec Technology and MidCap Financial

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

Diversification Opportunities for Pintec Technology and MidCap Financial

0.34

Correlation Coefficient

Pintec Technology  MidCap Financial

Weak diversification

The 3 months correlation between Pintec and MidCap is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv 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 MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of Pintec Technology i.e., Pintec Technology and MidCap Financial go up and down completely randomly.

Pair Corralation between Pintec Technology and MidCap Financial

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 5.35 times more return on investment than MidCap Financial. However, Pintec Technology is 5.35 times more volatile than MidCap Financial Investment. It trades about 0.12 of its potential returns per unit of risk. MidCap Financial Investment is currently generating about 0.03 per unit of risk. If you would invest  90.00  in Pintec Technology Holdings on December 28, 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 Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Pintec Technology Holdings  vs.  MidCap Financial Investment

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 abnormal basic indicators, Pintec Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

MidCap Financial Inv

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MidCap Financial Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, MidCap Financial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pintec Technology and MidCap Financial

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

The idea behind Pintec Technology Holdings and MidCap Financial Investment 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.