Correlation Between Pintec Technology and SWK Holdings

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

Diversification Opportunities for Pintec Technology and SWK Holdings

-0.63

Correlation Coefficient

Pintec Technology  SWK Holdings

Excellent diversification

The 3 months correlation between Pintec and SWK is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and SWK Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWK Holdings Corp 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 SWK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWK Holdings Corp has no effect on the direction of Pintec Technology i.e., Pintec Technology and SWK Holdings go up and down completely randomly.

Pair Corralation between Pintec Technology and SWK Holdings

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the SWK Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Pintec Technology Holdings is 1.04 times less risky than SWK Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The SWK Holdings Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,680  in SWK Holdings Corp on February 4, 2024 and sell it today you would earn a total of  79.00  from holding SWK Holdings Corp or generate 4.7% return on investment over 90 days.

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

Pintec Technology Holdings  vs.  SWK Holdings Corp

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.

SWK Holdings Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SWK Holdings Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking signals, SWK Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Pintec Technology and SWK Holdings

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

The idea behind Pintec Technology Holdings and SWK Holdings Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.