Correlation Between Jiayin and HSBC MSCI

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

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

Diversification Opportunities for Jiayin and HSBC MSCI

-0.47

Correlation Coefficient

Jiayin  HSBC MSCI

Very good diversification

The 3 months correlation between Jiayin and HSBC is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and HSBC MSCI WORLD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC MSCI WORLD 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 HSBC MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC MSCI WORLD has no effect on the direction of Jiayin i.e., Jiayin and HSBC MSCI go up and down completely randomly.

Pair Corralation between Jiayin and HSBC MSCI

Given the investment horizon of 90 days Jiayin Group is expected to under-perform the HSBC MSCI. In addition to that, Jiayin is 4.8 times more volatile than HSBC MSCI WORLD. It trades about -0.07 of its total potential returns per unit of risk. HSBC MSCI WORLD is currently generating about 0.17 per unit of volatility. If you would invest  2,707  in HSBC MSCI WORLD on October 6, 2024 and sell it today you would earn a total of  201.00  from holding HSBC MSCI WORLD or generate 7.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Jiayin Group  vs.  HSBC MSCI WORLD

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.

HSBC MSCI WORLD

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC MSCI WORLD are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, HSBC MSCI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jiayin and HSBC MSCI

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

The idea behind Jiayin Group and HSBC MSCI WORLD 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.