Correlation Between Jiayin and Columbia Small

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

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

Diversification Opportunities for Jiayin and Columbia Small

-0.28

Correlation Coefficient

Jiayin  Columbia Small

Very good diversification

The 3 months correlation between Jiayin and Columbia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Columbia Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Small Cap 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 Columbia Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Small Cap has no effect on the direction of Jiayin i.e., Jiayin and Columbia Small go up and down completely randomly.

Pair Corralation between Jiayin and Columbia Small

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.64 times more return on investment than Columbia Small. However, Jiayin is 1.64 times more volatile than Columbia Small Cap. It trades about 0.05 of its potential returns per unit of risk. Columbia Small Cap is currently generating about -0.07 per unit of risk. If you would invest  683.00  in Jiayin Group on October 21, 2024 and sell it today you would earn a total of  47.00  from holding Jiayin Group or generate 6.88% 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.  Columbia Small Cap

Jiayin Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Jiayin may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Columbia Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Jiayin and Columbia Small

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

The idea behind Jiayin Group and Columbia Small Cap 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.