Correlation Between Pintec Technology and 76720AAD8

Can any of the company-specific risk be diversified away by investing in both Pintec Technology and 76720AAD8 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 76720AAD8 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 RIO TINTO FIN, you can compare the effects of market volatilities on Pintec Technology and 76720AAD8 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 76720AAD8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and 76720AAD8.

Diversification Opportunities for Pintec Technology and 76720AAD8

-0.09

Correlation Coefficient

Pintec Technology  76720AAD8

Good diversification

The 3 months correlation between Pintec and 76720AAD8 is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and RIO TINTO FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RIO TINTO FIN 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 76720AAD8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RIO TINTO FIN has no effect on the direction of Pintec Technology i.e., Pintec Technology and 76720AAD8 go up and down completely randomly.

Pair Corralation between Pintec Technology and 76720AAD8

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 3.51 times more return on investment than 76720AAD8. However, Pintec Technology is 3.51 times more volatile than RIO TINTO FIN. It trades about 0.05 of its potential returns per unit of risk. RIO TINTO FIN is currently generating about -0.1 per unit of risk. If you would invest  96.00  in Pintec Technology Holdings on October 22, 2024 and sell it today you would earn a total of  4.00  from holding Pintec Technology Holdings or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Pintec Technology Holdings  vs.  RIO TINTO FIN

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.

RIO TINTO FIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RIO TINTO FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 76720AAD8 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pintec Technology and 76720AAD8

The main advantage of trading using opposite Pintec Technology and 76720AAD8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, 76720AAD8 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 76720AAD8 will offset losses from the drop in 76720AAD8's long position.

The idea behind Pintec Technology Holdings and RIO TINTO FIN 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.