Correlation Between Pintec Technology and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on Pintec Technology and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Strategic Education.
Diversification Opportunities for Pintec Technology and Strategic Education
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pintec and Strategic is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Pintec Technology i.e., Pintec Technology and Strategic Education go up and down completely randomly.
Pair Corralation between Pintec Technology and Strategic Education
Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the Strategic Education. In addition to that, Pintec Technology is 1.89 times more volatile than Strategic Education. It trades about -0.13 of its total potential returns per unit of risk. Strategic Education is currently generating about -0.23 per unit of volatility. If you would invest 9,860 in Strategic Education on October 9, 2024 and sell it today you would lose (664.00) from holding Strategic Education or give up 6.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pintec Technology Holdings vs. Strategic Education
Performance |
| Timeline |
| Pintec Technology |
| Strategic Education |
Pintec Technology and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pintec Technology and Strategic Education
The main advantage of trading using opposite Pintec Technology and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Pintec Technology vs. Senmiao Technology | Pintec Technology vs. X Financial Class | Pintec Technology vs. Yirendai | Pintec Technology vs. Qudian Inc |
| Strategic Education vs. Element Solutions | Strategic Education vs. DoubleVerify Holdings | Strategic Education vs. CECO Environmental Corp | Strategic Education vs. American Public Education |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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