Correlation Between Pintec Technology and Arbor Realty

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

Diversification Opportunities for Pintec Technology and Arbor Realty

-0.45

Correlation Coefficient

Pintec Technology  Arbor Realty

Very good diversification

The 3 months correlation between Pintec and Arbor is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pintec Technology Holdings and Arbor Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Realty Trust 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 Arbor Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Realty Trust has no effect on the direction of Pintec Technology i.e., Pintec Technology and Arbor Realty go up and down completely randomly.

Pair Corralation between Pintec Technology and Arbor Realty

Allowing for the 90-day total investment horizon Pintec Technology Holdings is expected to generate 2.41 times more return on investment than Arbor Realty. However, Pintec Technology is 2.41 times more volatile than Arbor Realty Trust. It trades about 0.01 of its potential returns per unit of risk. Arbor Realty Trust is currently generating about 0.02 per unit of risk. If you would invest  92.00  in Pintec Technology Holdings on August 15, 2024 and sell it today you would earn a total of  0.00  from holding Pintec Technology Holdings or generate 0.0% 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.  Arbor Realty Trust

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

Arbor Realty Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arbor Realty Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental drivers, Arbor Realty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pintec Technology and Arbor Realty

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

The idea behind Pintec Technology Holdings and Arbor Realty Trust 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.