Correlation Between Capital One and Pintec Technology
Can any of the company-specific risk be diversified away by investing in both Capital One 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 Capital One and Pintec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital One Financial and Pintec Technology Holdings, you can compare the effects of market volatilities on Capital One 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 Capital One with a short position of Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital One and Pintec Technology.
Diversification Opportunities for Capital One and Pintec Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Pintec is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Capital One 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 Capital One Financial 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 Capital One i.e., Capital One and Pintec Technology go up and down completely randomly.
Pair Corralation between Capital One and Pintec Technology
Considering the 90-day investment horizon Capital One is expected to generate 1.29 times less return on investment than Pintec Technology. But when comparing it to its historical volatility, Capital One Financial is 2.17 times less risky than Pintec Technology. It trades about 0.09 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Pintec Technology Holdings on September 12, 2024 and sell it today you would earn a total of 46.00 from holding Pintec Technology Holdings or generate 93.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital One Financial vs. Pintec Technology Holdings
Performance |
| Timeline |
| Capital One Financial |
| Pintec Technology |
Capital One and Pintec Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital One and Pintec Technology
The main advantage of trading using opposite Capital One and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital One 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.| Capital One vs. Victory Integrity Smallmid Cap | Capital One vs. Hilton Worldwide Holdings | Capital One vs. NVIDIA | Capital One vs. JPMorgan Chase Co |
| Pintec Technology vs. American Express | Pintec Technology vs. Capital One Financial | Pintec Technology vs. Upstart Holdings | Pintec Technology vs. Ally Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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