Correlation Between Pintec Technology and Medallion Financial

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

Diversification Opportunities for Pintec Technology and Medallion Financial

-0.54

Correlation Coefficient

Pintec Technology  Medallion Financial

Excellent diversification

The 3 months correlation between Pintec and Medallion is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Medallion Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Financial 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 Medallion Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Financial Corp has no effect on the direction of Pintec Technology i.e., Pintec Technology and Medallion Financial go up and down completely randomly.

Pair Corralation between Pintec Technology and Medallion Financial

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the Medallion Financial. In addition to that, Pintec Technology is 2.8 times more volatile than Medallion Financial Corp. It trades about 0.0 of its total potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.22 per unit of volatility. If you would invest  772.00  in Medallion Financial Corp on September 3, 2024 and sell it today you would earn a total of  170.00  from holding Medallion Financial Corp or generate 22.02% 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.  Medallion Financial 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 comparatively stable basic indicators, Pintec Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Medallion Financial Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Medallion Financial Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent forward indicators, Medallion Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pintec Technology and Medallion Financial

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

The idea behind Pintec Technology Holdings and Medallion Financial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..