Correlation Between Jiayin and China Gold

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

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

Diversification Opportunities for Jiayin and China Gold

-0.56

Correlation Coefficient

Jiayin  China Gold

Excellent diversification

The 3 months correlation between Jiayin and China is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and China Gold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gold International 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 China Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gold International has no effect on the direction of Jiayin i.e., Jiayin and China Gold go up and down completely randomly.

Pair Corralation between Jiayin and China Gold

Given the investment horizon of 90 days Jiayin Group is expected to under-perform the China Gold. But the stock apears to be less risky and, when comparing its historical volatility, Jiayin Group is 1.16 times less risky than China Gold. The stock trades about -0.06 of its potential returns per unit of risk. The China Gold International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  631.00  in China Gold International on October 4, 2024 and sell it today you would earn a total of  114.00  from holding China Gold International or generate 18.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Jiayin Group  vs.  China Gold International

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.

China Gold International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Gold International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, China Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and China Gold

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

The idea behind Jiayin Group and China Gold International 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.