Correlation Between Reservoir Media and Pintec Technology

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

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

Diversification Opportunities for Reservoir Media and Pintec Technology

-0.52

Correlation Coefficient

Reservoir Media  Pintec Technology

Excellent diversification

The 3 months correlation between Reservoir and Pintec is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Reservoir Media and Pintec Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pintec Technology and Reservoir Media 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 Reservoir Media 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 Reservoir Media i.e., Reservoir Media and Pintec Technology go up and down completely randomly.

Pair Corralation between Reservoir Media and Pintec Technology

Given the investment horizon of 90 days Reservoir Media is expected to generate 0.41 times more return on investment than Pintec Technology. However, Reservoir Media is 2.46 times less risky than Pintec Technology. It trades about 0.18 of its potential returns per unit of risk. Pintec Technology Holdings is currently generating about 0.02 per unit of risk. If you would invest  888.00  in Reservoir Media on September 14, 2024 and sell it today you would earn a total of  58.00  from holding Reservoir Media or generate 6.53% return on investment over 90 days.

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

Reservoir Media  vs.  Pintec Technology Holdings

Reservoir Media

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reservoir Media are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Reservoir Media reported 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 Reservoir Media and Pintec Technology

The main advantage of trading using opposite Reservoir Media and Pintec Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reservoir Media 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 Reservoir Media 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.