Correlation Between KEYCORP and Pintec Technology

Can any of the company-specific risk be diversified away by investing in both KEYCORP and Pintec Technology 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 KEYCORP and Pintec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KEYCORP MEDIUM TERM and Pintec Technology Holdings, you can compare the effects of market volatilities on KEYCORP and Pintec Technology 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 KEYCORP with a short position of Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEYCORP and Pintec Technology.

Diversification Opportunities for KEYCORP and Pintec Technology

0.11

Correlation Coefficient

KEYCORP  Pintec Technology

Average diversification

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

Pair Corralation between KEYCORP and Pintec Technology

Assuming the 90 days trading horizon KEYCORP MEDIUM TERM is expected to under-perform the Pintec Technology. But the bond apears to be less risky and, when comparing its historical volatility, KEYCORP MEDIUM TERM is 1.98 times less risky than Pintec Technology. The bond trades about -0.11 of its potential returns per unit of risk. The Pintec Technology Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Pintec Technology Holdings on December 24, 2024 and sell it today you would earn a total of  12.00  from holding Pintec Technology Holdings or generate 13.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

KEYCORP MEDIUM TERM  vs.  Pintec Technology Holdings

KEYCORP MEDIUM TERM

Risk-Adjusted Performance

Very Weak

Over the last 90 days KEYCORP MEDIUM TERM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KEYCORP MEDIUM TERM investors.

Pintec Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Pintec Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KEYCORP and Pintec Technology

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

The idea behind KEYCORP MEDIUM TERM and Pintec Technology Holdings 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.