Correlation Between Pintec Technology and WT Offshore

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

Diversification Opportunities for Pintec Technology and WT Offshore

-0.24

Correlation Coefficient

Pintec Technology  WT Offshore

Very good diversification

The 3 months correlation between Pintec and WTI is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore 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 WT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Offshore has no effect on the direction of Pintec Technology i.e., Pintec Technology and WT Offshore go up and down completely randomly.

Pair Corralation between Pintec Technology and WT Offshore

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 1.02 times more return on investment than WT Offshore. However, Pintec Technology is 1.02 times more volatile than WT Offshore. It trades about -0.01 of its potential returns per unit of risk. WT Offshore is currently generating about -0.01 per unit of risk. If you would invest  102.00  in Pintec Technology Holdings on September 5, 2024 and sell it today you would lose (7.00) from holding Pintec Technology Holdings or give up 6.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pintec Technology Holdings  vs.  WT Offshore

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

WT Offshore

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WT Offshore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, WT Offshore is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Pintec Technology and WT Offshore

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

The idea behind Pintec Technology Holdings and WT Offshore 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.