Correlation Between Jiayin and Xiangpiaopiao Food

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

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

Diversification Opportunities for Jiayin and Xiangpiaopiao Food

-0.55

Correlation Coefficient

Jiayin  Xiangpiaopiao Food

Excellent diversification

The 3 months correlation between Jiayin and Xiangpiaopiao is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Xiangpiaopiao Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangpiaopiao Food 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 Xiangpiaopiao Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangpiaopiao Food has no effect on the direction of Jiayin i.e., Jiayin and Xiangpiaopiao Food go up and down completely randomly.

Pair Corralation between Jiayin and Xiangpiaopiao Food

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.01 times more return on investment than Xiangpiaopiao Food. However, Jiayin is 1.01 times more volatile than Xiangpiaopiao Food Co. It trades about 0.06 of its potential returns per unit of risk. Xiangpiaopiao Food Co is currently generating about 0.02 per unit of risk. If you would invest  391.00  in Jiayin Group on October 4, 2024 and sell it today you would earn a total of  265.00  from holding Jiayin Group or generate 67.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.77%
Values	Daily Returns

Jiayin Group  vs.  Xiangpiaopiao Food 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 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.

Xiangpiaopiao Food

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xiangpiaopiao Food Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xiangpiaopiao Food sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Xiangpiaopiao Food

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

The idea behind Jiayin Group and Xiangpiaopiao Food 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.