Correlation Between Pintec Technology and Burford Capital
Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Burford Capital 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 Burford Capital 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 Burford Capital, you can compare the effects of market volatilities on Pintec Technology and Burford Capital 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 Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Burford Capital.
Diversification Opportunities for Pintec Technology and Burford Capital
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pintec and Burford is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital 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 Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Pintec Technology i.e., Pintec Technology and Burford Capital go up and down completely randomly.
Pair Corralation between Pintec Technology and Burford Capital
Allowing for the 90-day total investment horizon Pintec Technology is expected to generate 1.12 times less return on investment than Burford Capital. In addition to that, Pintec Technology is 1.42 times more volatile than Burford Capital. It trades about 0.01 of its total potential returns per unit of risk. Burford Capital is currently generating about 0.02 per unit of volatility. If you would invest 1,373 in Burford Capital on August 25, 2024 and sell it today you would earn a total of 8.00 from holding Burford Capital or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pintec Technology Holdings vs. Burford Capital
Performance |
| Timeline |
| Pintec Technology |
| Burford Capital |
Pintec Technology and Burford Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pintec Technology and Burford Capital
The main advantage of trading using opposite Pintec Technology and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.| Pintec Technology vs. Senmiao Technology | Pintec Technology vs. X Financial Class | Pintec Technology vs. Yirendai | Pintec Technology vs. Qudian Inc |
| Burford Capital vs. Prospect Capital | Burford Capital vs. State Street | Burford Capital vs. OFS Credit Company, | Burford Capital vs. OFS Credit |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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