Correlation Between Navient Corp and Pintec Technology

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

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

Diversification Opportunities for Navient Corp and Pintec Technology

0.21

Correlation Coefficient

Navient Corp  Pintec Technology

Modest diversification

The 3 months correlation between Navient and Pintec is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Navient Corp and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Navient Corp 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 Navient Corp 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 Navient Corp i.e., Navient Corp and Pintec Technology go up and down completely randomly.

Pair Corralation between Navient Corp and Pintec Technology

Given the investment horizon of 90 days Navient Corp is expected to generate 0.57 times more return on investment than Pintec Technology. However, Navient Corp is 1.75 times less risky than Pintec Technology. It trades about -0.01 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about -0.01 per unit of risk. If you would invest  1,583  in Navient Corp on September 5, 2024 and sell it today you would lose (55.00) from holding Navient Corp or give up 3.47% of portfolio value over 90 days.

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

Navient Corp  vs.  Pintec Technology Holdings

Navient Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Navient Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Navient Corp is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Navient Corp and Pintec Technology

The main advantage of trading using opposite Navient Corp and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Navient Corp 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 Navient Corp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.