Correlation Between Pintec Technology and Titan Machinery

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

Diversification Opportunities for Pintec Technology and Titan Machinery

-0.11

Correlation Coefficient

Pintec Technology  Titan Machinery

Good diversification

The 3 months correlation between Pintec and Titan is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery 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 Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Pintec Technology i.e., Pintec Technology and Titan Machinery go up and down completely randomly.

Pair Corralation between Pintec Technology and Titan Machinery

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 1.43 times more return on investment than Titan Machinery. However, Pintec Technology is 1.43 times more volatile than Titan Machinery. It trades about 0.06 of its potential returns per unit of risk. Titan Machinery is currently generating about -0.06 per unit of risk. If you would invest  41.00  in Pintec Technology Holdings on September 24, 2024 and sell it today you would earn a total of  51.01  from holding Pintec Technology Holdings or generate 124.41% 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.  Titan Machinery

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Titan Machinery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titan Machinery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Titan Machinery is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pintec Technology and Titan Machinery

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

The idea behind Pintec Technology Holdings and Titan Machinery 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.