Correlation Between Jiayin and DFDS A/S

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

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

Diversification Opportunities for Jiayin and DFDS A/S

0.74

Correlation Coefficient

Jiayin  DFDS A/S

Poor diversification

The 3 months correlation between Jiayin and DFDS is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS A/S 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 DFDS A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS A/S has no effect on the direction of Jiayin i.e., Jiayin and DFDS A/S go up and down completely randomly.

Pair Corralation between Jiayin and DFDS A/S

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.46 times more return on investment than DFDS A/S. However, Jiayin is 1.46 times more volatile than DFDS AS. It trades about -0.05 of its potential returns per unit of risk. DFDS AS is currently generating about -0.12 per unit of risk. If you would invest  762.00  in Jiayin Group on October 4, 2024 and sell it today you would lose (107.00) from holding Jiayin Group or give up 14.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Jiayin Group  vs.  DFDS AS

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.

DFDS A/S

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DFDS AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Jiayin and DFDS A/S

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

The idea behind Jiayin Group and DFDS AS 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..