Correlation Between Pintec Technology and Nomura Holdings

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

Diversification Opportunities for Pintec Technology and Nomura Holdings

-0.33

Correlation Coefficient

Pintec Technology  Nomura Holdings

Very good diversification

The 3 months correlation between Pintec and Nomura is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Nomura Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings ADR 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 Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings ADR has no effect on the direction of Pintec Technology i.e., Pintec Technology and Nomura Holdings go up and down completely randomly.

Pair Corralation between Pintec Technology and Nomura Holdings

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 2.26 times more return on investment than Nomura Holdings. However, Pintec Technology is 2.26 times more volatile than Nomura Holdings ADR. It trades about 0.06 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.05 per unit of risk. If you would invest  41.00  in Pintec Technology Holdings on September 20, 2024 and sell it today you would earn a total of  49.00  from holding Pintec Technology Holdings or generate 119.51% 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.  Nomura Holdings ADR

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.

Nomura Holdings ADR

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, Nomura Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pintec Technology and Nomura Holdings

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

The idea behind Pintec Technology Holdings and Nomura Holdings ADR 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.