Correlation Between Vita Coco and Pintec Technology

Can any of the company-specific risk be diversified away by investing in both Vita Coco and Pintec Technology 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 Vita Coco and Pintec Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vita Coco and Pintec Technology Holdings, you can compare the effects of market volatilities on Vita Coco and Pintec Technology 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 Vita Coco with a short position of Pintec Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and Pintec Technology.

Diversification Opportunities for Vita Coco and Pintec Technology

-0.43

Correlation Coefficient

Vita Coco  Pintec Technology

Very good diversification

The 3 months correlation between Vita and Pintec is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Vita Coco 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 Vita Coco are associated (or correlated) with Pintec Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pintec Technology has no effect on the direction of Vita Coco i.e., Vita Coco and Pintec Technology go up and down completely randomly.

Pair Corralation between Vita Coco and Pintec Technology

Given the investment horizon of 90 days Vita Coco is expected to generate 1.83 times less return on investment than Pintec Technology. But when comparing it to its historical volatility, Vita Coco is 2.69 times less risky than Pintec Technology. It trades about 0.1 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  91.00  in Pintec Technology Holdings on September 12, 2024 and sell it today you would earn a total of  4.00  from holding Pintec Technology Holdings or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vita Coco  vs.  Pintec Technology Holdings

Vita Coco

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.

Pintec Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pintec Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pintec Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vita Coco and Pintec Technology

The main advantage of trading using opposite Vita Coco and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco position performs unexpectedly, Pintec Technology 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 Pintec Technology will offset losses from the drop in Pintec Technology's long position.

The idea behind Vita Coco and Pintec Technology Holdings 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.