Correlation Between Pintec Technology and 629377CU4

Can any of the company-specific risk be diversified away by investing in both Pintec Technology and 629377CU4 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 629377CU4 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 NRG 1025, you can compare the effects of market volatilities on Pintec Technology and 629377CU4 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 629377CU4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and 629377CU4.

Diversification Opportunities for Pintec Technology and 629377CU4

0.21

Correlation Coefficient

Pintec Technology  629377CU4

Modest diversification

The 3 months correlation between Pintec and 629377CU4 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and NRG 1025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 629377CU4 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 629377CU4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 629377CU4 has no effect on the direction of Pintec Technology i.e., Pintec Technology and 629377CU4 go up and down completely randomly.

Pair Corralation between Pintec Technology and 629377CU4

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 1.37 times more return on investment than 629377CU4. However, Pintec Technology is 1.37 times more volatile than NRG 1025. It trades about 0.06 of its potential returns per unit of risk. NRG 1025 is currently generating about 0.04 per unit of risk. If you would invest  92.00  in Pintec Technology Holdings on October 7, 2024 and sell it today you would earn a total of  6.00  from holding Pintec Technology Holdings or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	65.85%
Values	Daily Returns

Pintec Technology Holdings  vs.  NRG 1025

Pintec Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Pintec Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

629377CU4

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NRG 1025 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 629377CU4 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pintec Technology and 629377CU4

The main advantage of trading using opposite Pintec Technology and 629377CU4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, 629377CU4 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 629377CU4 will offset losses from the drop in 629377CU4's long position.

The idea behind Pintec Technology Holdings and NRG 1025 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.