Correlation Between Pintec Technology and First Trust

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

Diversification Opportunities for Pintec Technology and First Trust

-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pintec and First is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and First Trust High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust High 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust High has no effect on the direction of Pintec Technology i.e., Pintec Technology and First Trust go up and down completely randomly.

Pair Corralation between Pintec Technology and First Trust

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the First Trust. In addition to that, Pintec Technology is 5.44 times more volatile than First Trust High. It trades about -0.01 of its total potential returns per unit of risk. First Trust High is currently generating about 0.14 per unit of volatility. If you would invest  1,344  in First Trust High on August 25, 2024 and sell it today you would earn a total of  145.00  from holding First Trust High or generate 10.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Pintec Technology Holdings  vs.  First Trust High

 Performance 
       Timeline  
Pintec Technology 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Pintec Technology Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pintec Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
First Trust High 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in First Trust High are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, First Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pintec Technology and First Trust Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pintec Technology and First Trust

The main advantage of trading using opposite Pintec Technology and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.
The idea behind Pintec Technology Holdings and First Trust High 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.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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