Correlation Between Jiayin and ConocoPhillips

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

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

Diversification Opportunities for Jiayin and ConocoPhillips

-0.45

Correlation Coefficient

Jiayin  ConocoPhillips

Very good diversification

The 3 months correlation between Jiayin and ConocoPhillips is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips 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 ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Jiayin i.e., Jiayin and ConocoPhillips go up and down completely randomly.

Pair Corralation between Jiayin and ConocoPhillips

Given the investment horizon of 90 days Jiayin Group is expected to under-perform the ConocoPhillips. In addition to that, Jiayin is 1.78 times more volatile than ConocoPhillips. It trades about -0.07 of its total potential returns per unit of risk. ConocoPhillips is currently generating about -0.01 per unit of volatility. If you would invest  5,250  in ConocoPhillips on October 5, 2024 and sell it today you would lose (119.00) from holding ConocoPhillips or give up 2.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.55%
Values	Daily Returns

Jiayin Group  vs.  ConocoPhillips

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.

ConocoPhillips

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ConocoPhillips has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ConocoPhillips is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jiayin and ConocoPhillips

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

The idea behind Jiayin Group and ConocoPhillips 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.