Correlation Between Jiayin and Kanzhun

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

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

Diversification Opportunities for Jiayin and Kanzhun

0.91

Correlation Coefficient

Jiayin  Kanzhun

Almost no diversification

The 3 months correlation between Jiayin and Kanzhun is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Kanzhun Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kanzhun Ltd ADR 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 Kanzhun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kanzhun Ltd ADR has no effect on the direction of Jiayin i.e., Jiayin and Kanzhun go up and down completely randomly.

Pair Corralation between Jiayin and Kanzhun

Given the investment horizon of 90 days Jiayin Group is expected to generate 2.68 times more return on investment than Kanzhun. However, Jiayin is 2.68 times more volatile than Kanzhun Ltd ADR. It trades about 0.2 of its potential returns per unit of risk. Kanzhun Ltd ADR is currently generating about 0.2 per unit of risk. If you would invest  637.00  in Jiayin Group on December 28, 2024 and sell it today you would earn a total of  758.00  from holding Jiayin Group or generate 119.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Jiayin Group  vs.  Kanzhun Ltd ADR

Jiayin Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Jiayin displayed solid returns over the last few months and may actually be approaching a breakup point.

Kanzhun Ltd ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kanzhun showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Kanzhun

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

The idea behind Jiayin Group and Kanzhun Ltd ADR 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.