Correlation Between Jiayin and Grand Canyon

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

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

Diversification Opportunities for Jiayin and Grand Canyon

-0.53

Correlation Coefficient

Jiayin  Grand Canyon

Excellent diversification

The 3 months correlation between Jiayin and Grand is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Jiayin i.e., Jiayin and Grand Canyon go up and down completely randomly.

Pair Corralation between Jiayin and Grand Canyon

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.98 times more return on investment than Grand Canyon. However, Jiayin is 1.98 times more volatile than Grand Canyon Education. It trades about 0.05 of its potential returns per unit of risk. Grand Canyon Education is currently generating about -0.04 per unit of risk. If you would invest  644.00  in Jiayin Group on October 5, 2024 and sell it today you would earn a total of  12.00  from holding Jiayin Group or generate 1.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.0%
Values	Daily Returns

Jiayin Group  vs.  Grand Canyon Education

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.

Grand Canyon Education

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Grand Canyon Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Grand Canyon reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Grand Canyon

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

The idea behind Jiayin Group and Grand Canyon Education 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.