Correlation Between Jiayin and Mainstay Epoch

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

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

Diversification Opportunities for Jiayin and Mainstay Epoch

-0.58

Correlation Coefficient

Jiayin  Mainstay Epoch

Excellent diversification

The 3 months correlation between Jiayin and Mainstay is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Mainstay Epoch Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Epoch Small 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 Mainstay Epoch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Epoch Small has no effect on the direction of Jiayin i.e., Jiayin and Mainstay Epoch go up and down completely randomly.

Pair Corralation between Jiayin and Mainstay Epoch

Given the investment horizon of 90 days Jiayin Group is expected to generate 2.72 times more return on investment than Mainstay Epoch. However, Jiayin is 2.72 times more volatile than Mainstay Epoch Small. It trades about 0.06 of its potential returns per unit of risk. Mainstay Epoch Small is currently generating about 0.08 per unit of risk. If you would invest  437.00  in Jiayin Group on October 5, 2024 and sell it today you would earn a total of  219.00  from holding Jiayin Group or generate 50.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

Jiayin Group  vs.  Mainstay Epoch Small

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.

Mainstay Epoch Small

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Epoch Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Mainstay Epoch may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jiayin and Mainstay Epoch

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

The idea behind Jiayin Group and Mainstay Epoch Small 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.