Correlation Between Pintec Technology and Ready Capital
Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Ready 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 Ready 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 Ready Capital, you can compare the effects of market volatilities on Pintec Technology and Ready 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 Ready Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Ready Capital.
Diversification Opportunities for Pintec Technology and Ready Capital
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pintec and Ready is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Ready Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ready 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 Ready Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ready Capital has no effect on the direction of Pintec Technology i.e., Pintec Technology and Ready Capital go up and down completely randomly.
Pair Corralation between Pintec Technology and Ready Capital
Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 10.56 times more return on investment than Ready Capital. However, Pintec Technology is 10.56 times more volatile than Ready Capital. It trades about 0.01 of its potential returns per unit of risk. Ready Capital is currently generating about 0.1 per unit of risk. If you would invest 102.00 in Pintec Technology Holdings on August 28, 2024 and sell it today you would lose (2.00) from holding Pintec Technology Holdings or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pintec Technology Holdings vs. Ready Capital
Performance |
| Timeline |
| Pintec Technology |
| Ready Capital |
Pintec Technology and Ready Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pintec Technology and Ready Capital
The main advantage of trading using opposite Pintec Technology and Ready Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, Ready 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 Ready Capital will offset losses from the drop in Ready Capital's long position.| Pintec Technology vs. SLM Corp | Pintec Technology vs. Orix Corp Ads | Pintec Technology vs. FirstCash | Pintec Technology vs. Medallion Financial Corp |
| Ready Capital vs. QVCC | Ready Capital vs. Eagle Point Credit | Ready Capital vs. National Rural Utilities |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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