Correlation Between Jiayin and Metacrine

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

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

Diversification Opportunities for Jiayin and Metacrine

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Correlation Coefficient

Jiayin  Metacrine

Pay attention - limited upside

The 3 months correlation between Jiayin and Metacrine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Metacrine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metacrine 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 Metacrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metacrine has no effect on the direction of Jiayin i.e., Jiayin and Metacrine go up and down completely randomly.

Pair Corralation between Jiayin and Metacrine

Given the investment horizon of 90 days Jiayin is expected to generate 2.13 times less return on investment than Metacrine. In addition to that, Jiayin is 1.53 times more volatile than Metacrine. It trades about 0.06 of its total potential returns per unit of risk. Metacrine is currently generating about 0.2 per unit of volatility. If you would invest  44.00  in Metacrine on October 4, 2024 and sell it today you would earn a total of  5.00  from holding Metacrine or generate 11.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.04%
Values	Daily Returns

Jiayin Group  vs.  Metacrine

Jiayin Group

Risk-Adjusted Performance

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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 latest fragile performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Metacrine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metacrine has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Metacrine is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Jiayin and Metacrine

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

The idea behind Jiayin Group and Metacrine 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.