Correlation Between Pintec Technology and Arrow Financial
Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Arrow Financial 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 Arrow Financial 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 Arrow Financial, you can compare the effects of market volatilities on Pintec Technology and Arrow Financial 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 Arrow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Arrow Financial.
Diversification Opportunities for Pintec Technology and Arrow Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pintec and Arrow is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Arrow Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Financial 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 Arrow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Financial has no effect on the direction of Pintec Technology i.e., Pintec Technology and Arrow Financial go up and down completely randomly.
Pair Corralation between Pintec Technology and Arrow Financial
Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the Arrow Financial. In addition to that, Pintec Technology is 1.59 times more volatile than Arrow Financial. It trades about -0.01 of its total potential returns per unit of risk. Arrow Financial is currently generating about 0.23 per unit of volatility. If you would invest 2,370 in Arrow Financial on March 12, 2024 and sell it today you would earn a total of 148.00 from holding Arrow Financial or generate 6.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pintec Technology Holdings vs. Arrow Financial
Performance |
Timeline |
Pintec Technology |
Arrow Financial |
Pintec Technology and Arrow Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pintec Technology and Arrow Financial
The main advantage of trading using opposite Pintec Technology and Arrow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, Arrow Financial 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 Arrow Financial will offset losses from the drop in Arrow Financial's long position.Pintec Technology vs. Senmiao Technology | Pintec Technology vs. X Financial Class | Pintec Technology vs. Yirendai | Pintec Technology vs. Qudian Inc |
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Check out your portfolio center.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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