Correlation Between American Express and Pintec Technology
Can any of the company-specific risk be diversified away by investing in both American Express 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 American Express and Pintec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Pintec Technology Holdings, you can compare the effects of market volatilities on American Express 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 American Express with a short position of Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Pintec Technology.
Diversification Opportunities for American Express and Pintec Technology
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Pintec is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and American Express 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 American Express 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 American Express i.e., American Express and Pintec Technology go up and down completely randomly.
Pair Corralation between American Express and Pintec Technology
Considering the 90-day investment horizon American Express is expected to generate 0.68 times more return on investment than Pintec Technology. However, American Express is 1.47 times less risky than Pintec Technology. It trades about 0.19 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about -0.05 per unit of risk. If you would invest 27,123 in American Express on August 24, 2024 and sell it today you would earn a total of 2,177 from holding American Express or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Express vs. Pintec Technology Holdings
Performance |
| Timeline |
| American Express |
| Pintec Technology |
American Express and Pintec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Pintec Technology
The main advantage of trading using opposite American Express and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express 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.| American Express vs. Visa Class A | American Express vs. Mastercard | American Express vs. SoFi Technologies | American Express vs. Coca Cola Consolidated |
| Pintec Technology vs. Senmiao Technology | Pintec Technology vs. X Financial Class | Pintec Technology vs. Yirendai | Pintec Technology vs. Qudian Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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