Correlation Between Pintec Technology and Cipher Mining

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

Diversification Opportunities for Pintec Technology and Cipher Mining

-0.54

Correlation Coefficient

Pintec Technology  Cipher Mining

Excellent diversification

The 3 months correlation between Pintec and Cipher is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining 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 Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of Pintec Technology i.e., Pintec Technology and Cipher Mining go up and down completely randomly.

Pair Corralation between Pintec Technology and Cipher Mining

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to under-perform the Cipher Mining. But the stock apears to be less risky and, when comparing its historical volatility, Pintec Technology Holdings is 1.61 times less risky than Cipher Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Cipher Mining is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  309.00  in Cipher Mining on September 13, 2024 and sell it today you would earn a total of  337.00  from holding Cipher Mining or generate 109.06% return on investment over 90 days.

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

Pintec Technology Holdings  vs.  Cipher Mining

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.

Cipher Mining

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cipher Mining are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Cipher Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pintec Technology and Cipher Mining

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

The idea behind Pintec Technology Holdings and Cipher Mining 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.