Correlation Between Jiayin and Dongwoon Anatech

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

By analyzing existing cross correlation between Jiayin Group and Dongwoon Anatech Co, you can compare the effects of market volatilities on Jiayin and Dongwoon Anatech 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 Jiayin with a short position of Dongwoon Anatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and Dongwoon Anatech.

Diversification Opportunities for Jiayin and Dongwoon Anatech

-0.1

Correlation Coefficient

Jiayin  Dongwoon Anatech

Good diversification

The 3 months correlation between Jiayin and Dongwoon is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Dongwoon Anatech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoon Anatech and Jiayin 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 Jiayin Group are associated (or correlated) with Dongwoon Anatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoon Anatech has no effect on the direction of Jiayin i.e., Jiayin and Dongwoon Anatech go up and down completely randomly.

Pair Corralation between Jiayin and Dongwoon Anatech

Given the investment horizon of 90 days Jiayin is expected to generate 3.73 times less return on investment than Dongwoon Anatech. But when comparing it to its historical volatility, Jiayin Group is 1.26 times less risky than Dongwoon Anatech. It trades about 0.09 of its potential returns per unit of risk. Dongwoon Anatech Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,605,219  in Dongwoon Anatech Co on October 6, 2024 and sell it today you would earn a total of  309,781  from holding Dongwoon Anatech Co or generate 19.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Jiayin Group  vs.  Dongwoon Anatech Co

Jiayin Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiayin Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dongwoon Anatech

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dongwoon Anatech Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dongwoon Anatech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Dongwoon Anatech

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

The idea behind Jiayin Group and Dongwoon Anatech Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.