Correlation Between Pintec Technology and Royce Micro
Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Royce Micro 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 Royce Micro 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 Royce Micro Cap, you can compare the effects of market volatilities on Pintec Technology and Royce Micro 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 Royce Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Royce Micro.
Diversification Opportunities for Pintec Technology and Royce Micro
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pintec and Royce is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Royce Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royce Micro Cap 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 Royce Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royce Micro Cap has no effect on the direction of Pintec Technology i.e., Pintec Technology and Royce Micro go up and down completely randomly.
Pair Corralation between Pintec Technology and Royce Micro
Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 3.1 times more return on investment than Royce Micro. However, Pintec Technology is 3.1 times more volatile than Royce Micro Cap. It trades about 0.06 of its potential returns per unit of risk. Royce Micro Cap is currently generating about 0.05 per unit of risk. If you would invest 40.00 in Pintec Technology Holdings on August 31, 2024 and sell it today you would earn a total of 56.00 from holding Pintec Technology Holdings or generate 140.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Pintec Technology Holdings vs. Royce Micro Cap
Performance |
| Timeline |
| Pintec Technology |
| Royce Micro Cap |
Pintec Technology and Royce Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pintec Technology and Royce Micro
The main advantage of trading using opposite Pintec Technology and Royce Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, Royce Micro 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 Royce Micro will offset losses from the drop in Royce Micro's long position.| Pintec Technology vs. Senmiao Technology | Pintec Technology vs. X Financial Class | Pintec Technology vs. Yirendai | Pintec Technology vs. Qudian Inc |
| Royce Micro vs. HUMANA INC | Royce Micro vs. SCOR PK | Royce Micro vs. Aquagold International | Royce Micro vs. Thrivent High Yield |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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