Correlation Between Jiayin and MediaAlpha

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

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

Diversification Opportunities for Jiayin and MediaAlpha

-0.38

Correlation Coefficient

Jiayin  MediaAlpha

Very good diversification

The 3 months correlation between Jiayin and MediaAlpha is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and MediaAlpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaAlpha 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 MediaAlpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaAlpha has no effect on the direction of Jiayin i.e., Jiayin and MediaAlpha go up and down completely randomly.

Pair Corralation between Jiayin and MediaAlpha

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.99 times more return on investment than MediaAlpha. However, Jiayin is 1.99 times more volatile than MediaAlpha. It trades about 0.2 of its potential returns per unit of risk. MediaAlpha is currently generating about -0.05 per unit of risk. If you would invest  637.00  in Jiayin Group on December 30, 2024 and sell it today you would earn a total of  758.00  from holding Jiayin Group or generate 119.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jiayin Group  vs.  MediaAlpha

Jiayin Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Jiayin displayed solid returns over the last few months and may actually be approaching a breakup point.

MediaAlpha

Risk-Adjusted Performance

Very Weak

Over the last 90 days MediaAlpha has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jiayin and MediaAlpha

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

The idea behind Jiayin Group and MediaAlpha 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.