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
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pintec and Arrow is -0.41. 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 generate 1.86 times more return on investment than Arrow Financial. However, Pintec Technology is 1.86 times more volatile than Arrow Financial. It trades about 0.05 of its potential returns per unit of risk. Arrow Financial is currently generating about 0.02 per unit of risk. 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 |
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. American Express | Pintec Technology vs. Capital One Financial | Pintec Technology vs. Upstart Holdings | Pintec Technology vs. Ally Financial |
| Arrow Financial vs. Heritage Commerce Corp | Arrow Financial vs. Westamerica Bancorporation | Arrow Financial vs. Heritage Financial | Arrow Financial vs. National Bankshares |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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