Correlation Between Jiayin and WUXI BIOLOGICS

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

By analyzing existing cross correlation between Jiayin Group and WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on Jiayin and WUXI BIOLOGICS 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 WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and WUXI BIOLOGICS.

Diversification Opportunities for Jiayin and WUXI BIOLOGICS

0.44

Correlation Coefficient

Jiayin  WUXI BIOLOGICS

Very weak diversification

The 3 months correlation between Jiayin and WUXI is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 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 WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of Jiayin i.e., Jiayin and WUXI BIOLOGICS go up and down completely randomly.

Pair Corralation between Jiayin and WUXI BIOLOGICS

Given the investment horizon of 90 days Jiayin Group is expected to generate 0.99 times more return on investment than WUXI BIOLOGICS. However, Jiayin Group is 1.01 times less risky than WUXI BIOLOGICS. It trades about 0.06 of its potential returns per unit of risk. WUXI BIOLOGICS UNSPADR2 is currently generating about -0.04 per unit of risk. If you would invest  273.00  in Jiayin Group on October 4, 2024 and sell it today you would earn a total of  383.00  from holding Jiayin Group or generate 140.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.8%
Values	Daily Returns

Jiayin Group  vs.  WUXI BIOLOGICS UNSPADR2

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 latest fragile performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

WUXI BIOLOGICS UNSPADR2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WUXI BIOLOGICS UNSPADR2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WUXI BIOLOGICS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jiayin and WUXI BIOLOGICS

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

The idea behind Jiayin Group and WUXI BIOLOGICS UNSPADR2 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.