Correlation Between Jiayin and Nutritional Growth

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

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

Diversification Opportunities for Jiayin and Nutritional Growth

-0.62

Correlation Coefficient

Jiayin  Nutritional Growth

Excellent diversification

The 3 months correlation between Jiayin and Nutritional is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Nutritional Growth Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutritional Growth 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 Nutritional Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutritional Growth has no effect on the direction of Jiayin i.e., Jiayin and Nutritional Growth go up and down completely randomly.

Pair Corralation between Jiayin and Nutritional Growth

Given the investment horizon of 90 days Jiayin is expected to generate 482.19 times less return on investment than Nutritional Growth. But when comparing it to its historical volatility, Jiayin Group is 82.46 times less risky than Nutritional Growth. It trades about 0.05 of its potential returns per unit of risk. Nutritional Growth Solutions is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Nutritional Growth Solutions on October 5, 2024 and sell it today you would lose (14.50) from holding Nutritional Growth Solutions or give up 76.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	88.39%
Values	Daily Returns

Jiayin Group  vs.  Nutritional Growth Solutions

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.

Nutritional Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nutritional Growth Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nutritional Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jiayin and Nutritional Growth

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

The idea behind Jiayin Group and Nutritional Growth Solutions 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 Transaction History module to view history of all your transactions and understand their impact on performance.