Correlation Between Jiayin and Sea Sonic

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

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

Diversification Opportunities for Jiayin and Sea Sonic

0.31

Correlation Coefficient

Jiayin  Sea Sonic

Weak diversification

The 3 months correlation between Jiayin and Sea is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Sea Sonic Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Sonic Electronics 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 Sea Sonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Sonic Electronics has no effect on the direction of Jiayin i.e., Jiayin and Sea Sonic go up and down completely randomly.

Pair Corralation between Jiayin and Sea Sonic

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.92 times more return on investment than Sea Sonic. However, Jiayin is 1.92 times more volatile than Sea Sonic Electronics. It trades about 0.07 of its potential returns per unit of risk. Sea Sonic Electronics is currently generating about 0.04 per unit of risk. If you would invest  279.00  in Jiayin Group on October 22, 2024 and sell it today you would earn a total of  451.00  from holding Jiayin Group or generate 161.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.59%
Values	Daily Returns

Jiayin Group  vs.  Sea Sonic Electronics

Jiayin Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Jiayin may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sea Sonic Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sea Sonic Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sea Sonic is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Jiayin and Sea Sonic

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

The idea behind Jiayin Group and Sea Sonic Electronics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.