Correlation Between Jiayin and JOHNSON SVC

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

By analyzing existing cross correlation between Jiayin Group and JOHNSON SVC LS 10, you can compare the effects of market volatilities on Jiayin and JOHNSON SVC 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 JOHNSON SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and JOHNSON SVC.

Diversification Opportunities for Jiayin and JOHNSON SVC

0.13

Correlation Coefficient

Jiayin  JOHNSON SVC

Average diversification

The 3 months correlation between Jiayin and JOHNSON is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and JOHNSON SVC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JOHNSON SVC LS 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 JOHNSON SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JOHNSON SVC LS has no effect on the direction of Jiayin i.e., Jiayin and JOHNSON SVC go up and down completely randomly.

Pair Corralation between Jiayin and JOHNSON SVC

Given the investment horizon of 90 days Jiayin Group is expected to under-perform the JOHNSON SVC. In addition to that, Jiayin is 1.15 times more volatile than JOHNSON SVC LS 10. It trades about -0.07 of its total potential returns per unit of risk. JOHNSON SVC LS 10 is currently generating about -0.07 per unit of volatility. If you would invest  182.00  in JOHNSON SVC LS 10 on October 5, 2024 and sell it today you would lose (27.00) from holding JOHNSON SVC LS 10 or give up 14.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Jiayin Group  vs.  JOHNSON SVC LS 10

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.

JOHNSON SVC LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JOHNSON SVC LS 10 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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 JOHNSON SVC

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

The idea behind Jiayin Group and JOHNSON SVC LS 10 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.