Correlation Between Pintec Technology and Broad Capital

Can any of the company-specific risk be diversified away by investing in both Pintec Technology and Broad Capital 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 Broad Capital 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 Broad Capital Acquisition, you can compare the effects of market volatilities on Pintec Technology and Broad Capital 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 Broad Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pintec Technology and Broad Capital.

Diversification Opportunities for Pintec Technology and Broad Capital

-0.39

Correlation Coefficient

Pintec Technology  Broad Capital

Very good diversification

The 3 months correlation between Pintec and Broad is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Broad Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broad Capital Acquisition 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 Broad Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broad Capital Acquisition has no effect on the direction of Pintec Technology i.e., Pintec Technology and Broad Capital go up and down completely randomly.

Pair Corralation between Pintec Technology and Broad Capital

Allowing for the 90-day total investment horizon Pintec Technology is expected to generate 31.49 times less return on investment than Broad Capital. But when comparing it to its historical volatility, Pintec Technology Holdings is 21.12 times less risky than Broad Capital. It trades about 0.05 of its potential returns per unit of risk. Broad Capital Acquisition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,015  in Broad Capital Acquisition on September 14, 2024 and sell it today you would earn a total of  157.00  from holding Broad Capital Acquisition or generate 15.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.49%
Values	Daily Returns

Pintec Technology Holdings  vs.  Broad Capital Acquisition

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.

Broad Capital Acquisition

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broad Capital Acquisition are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Broad Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pintec Technology and Broad Capital

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

The idea behind Pintec Technology Holdings and Broad Capital Acquisition 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.