Correlation Between Jiayin and Destinations Municipal

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Can any of the company-specific risk be diversified away by investing in both Jiayin and Destinations Municipal 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 Destinations Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiayin Group and Destinations Municipal Fixed, you can compare the effects of market volatilities on Jiayin and Destinations Municipal 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 Destinations Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and Destinations Municipal.

Diversification Opportunities for Jiayin and Destinations Municipal

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between Jiayin and Destinations is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Destinations Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destinations Municipal 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 Destinations Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destinations Municipal has no effect on the direction of Jiayin i.e., Jiayin and Destinations Municipal go up and down completely randomly.

Pair Corralation between Jiayin and Destinations Municipal

Given the investment horizon of 90 days Jiayin Group is expected to generate 22.42 times more return on investment than Destinations Municipal. However, Jiayin is 22.42 times more volatile than Destinations Municipal Fixed. It trades about 0.08 of its potential returns per unit of risk. Destinations Municipal Fixed is currently generating about 0.03 per unit of risk. If you would invest  550.00  in Jiayin Group on October 20, 2024 and sell it today you would earn a total of  180.00  from holding Jiayin Group or generate 32.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jiayin Group  vs.  Destinations Municipal Fixed

 Performance 
       Timeline  
Jiayin Group 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 4 (%) 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.
Destinations Municipal 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Destinations Municipal Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Destinations Municipal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jiayin and Destinations Municipal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jiayin and Destinations Municipal

The main advantage of trading using opposite Jiayin and Destinations Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiayin position performs unexpectedly, Destinations Municipal 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 Destinations Municipal will offset losses from the drop in Destinations Municipal's long position.
The idea behind Jiayin Group and Destinations Municipal Fixed 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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