Correlation Between Jiayin and Gaming

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

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

Diversification Opportunities for Jiayin and Gaming

-0.38

Correlation Coefficient

Jiayin  Gaming

Very good diversification

The 3 months correlation between Jiayin and Gaming is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure 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 Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Jiayin i.e., Jiayin and Gaming go up and down completely randomly.

Pair Corralation between Jiayin and Gaming

Given the investment horizon of 90 days Jiayin Group is expected to generate 3.27 times more return on investment than Gaming. However, Jiayin is 3.27 times more volatile than Gaming and Leisure. It trades about 0.05 of its potential returns per unit of risk. Gaming and Leisure is currently generating about 0.04 per unit of risk. If you would invest  437.00  in Jiayin Group on October 4, 2024 and sell it today you would earn a total of  218.00  from holding Jiayin Group or generate 49.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.47%
Values	Daily Returns

Jiayin Group  vs.  Gaming and Leisure

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.

Gaming and Leisure

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming and Leisure are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gaming is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jiayin and Gaming

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

The idea behind Jiayin Group and Gaming and Leisure 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.