Correlation Between Pintec Technology and Western Union
Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Western Union 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 Western Union 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 Western Union Co, you can compare the effects of market volatilities on Pintec Technology and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Western Union.
Diversification Opportunities for Pintec Technology and Western Union
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pintec and Western is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Pintec Technology i.e., Pintec Technology and Western Union go up and down completely randomly.
Pair Corralation between Pintec Technology and Western Union
Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 2.46 times more return on investment than Western Union. However, Pintec Technology is 2.46 times more volatile than Western Union Co. It trades about 0.01 of its potential returns per unit of risk. Western Union Co is currently generating about -0.03 per unit of risk. If you would invest 100.00 in Pintec Technology Holdings on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Pintec Technology Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pintec Technology Holdings vs. Western Union Co
Performance |
| Timeline |
| Pintec Technology |
| Western Union |
Pintec Technology and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pintec Technology and Western Union
The main advantage of trading using opposite Pintec Technology and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pintec Technology position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| Pintec Technology vs. Senmiao Technology | Pintec Technology vs. X Financial Class | Pintec Technology vs. Yirendai | Pintec Technology vs. Qudian Inc |
| Western Union vs. American Express | Western Union vs. Morningstar Unconstrained Allocation | Western Union vs. Sitka Gold Corp | Western Union vs. MSCI ACWI exAUCONSUMER |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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