Correlation Between Jiayin and Caspian Services

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

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

Diversification Opportunities for Jiayin and Caspian Services

-0.75

Correlation Coefficient

Jiayin  Caspian Services

Pay attention - limited upside

The 3 months correlation between Jiayin and Caspian is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Caspian Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caspian Services 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 Caspian Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caspian Services has no effect on the direction of Jiayin i.e., Jiayin and Caspian Services go up and down completely randomly.

Pair Corralation between Jiayin and Caspian Services

Given the investment horizon of 90 days Jiayin is expected to generate 7.6 times less return on investment than Caspian Services. But when comparing it to its historical volatility, Jiayin Group is 10.46 times less risky than Caspian Services. It trades about 0.06 of its potential returns per unit of risk. Caspian Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.11  in Caspian Services on October 4, 2024 and sell it today you would earn a total of  0.29  from holding Caspian Services or generate 263.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Jiayin Group  vs.  Caspian Services

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.

Caspian Services

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caspian Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Caspian Services showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Caspian Services

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

The idea behind Jiayin Group and Caspian Services 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.