Correlation Between Pintec Technology and KLA Tencor

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

Diversification Opportunities for Pintec Technology and KLA Tencor

0.13

Correlation Coefficient

Pintec Technology  KLA Tencor

Average diversification

The 3 months correlation between Pintec and KLA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor 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 KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Pintec Technology i.e., Pintec Technology and KLA Tencor go up and down completely randomly.

Pair Corralation between Pintec Technology and KLA Tencor

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 4.55 times more return on investment than KLA Tencor. However, Pintec Technology is 4.55 times more volatile than KLA Tencor. It trades about 0.02 of its potential returns per unit of risk. KLA Tencor is currently generating about 0.09 per unit of risk. If you would invest  226.00  in Pintec Technology Holdings on March 12, 2024 and sell it today you would lose (119.00) from holding Pintec Technology Holdings or give up 52.65% of portfolio value over 90 days.

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

Pintec Technology Holdings  vs.  KLA Tencor

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

KLA Tencor

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KLA Tencor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, KLA Tencor may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Pintec Technology and KLA Tencor

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

The idea behind Pintec Technology Holdings and KLA Tencor 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.