Correlation Between Jiayin and Mcleod Russel

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

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

Diversification Opportunities for Jiayin and Mcleod Russel

-0.23

Correlation Coefficient

Jiayin  Mcleod Russel

Very good diversification

The 3 months correlation between Jiayin and Mcleod is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Mcleod Russel India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mcleod Russel India 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 Mcleod Russel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mcleod Russel India has no effect on the direction of Jiayin i.e., Jiayin and Mcleod Russel go up and down completely randomly.

Pair Corralation between Jiayin and Mcleod Russel

Given the investment horizon of 90 days Jiayin is expected to generate 1.61 times less return on investment than Mcleod Russel. But when comparing it to its historical volatility, Jiayin Group is 1.11 times less risky than Mcleod Russel. It trades about 0.06 of its potential returns per unit of risk. Mcleod Russel India is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,285  in Mcleod Russel India on October 5, 2024 and sell it today you would earn a total of  2,329  from holding Mcleod Russel India or generate 101.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.39%
Values	Daily Returns

Jiayin Group  vs.  Mcleod Russel India

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.

Mcleod Russel India

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mcleod Russel India are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mcleod Russel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Mcleod Russel

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

The idea behind Jiayin Group and Mcleod Russel India 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.