Correlation Between Jiayin and OVERSEA CHINUNSPADR2

Can any of the company-specific risk be diversified away by investing in both Jiayin and OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiayin Group and OVERSEA CHINUNSPADR2, you can compare the effects of market volatilities on Jiayin and OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and OVERSEA CHINUNSPADR2.

Diversification Opportunities for Jiayin and OVERSEA CHINUNSPADR2

-0.18

Correlation Coefficient

Jiayin  OVERSEA CHINUNSPADR2

Good diversification

The 3 months correlation between Jiayin and OVERSEA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and OVERSEA CHINUNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVERSEA CHINUNSPADR2 has no effect on the direction of Jiayin i.e., Jiayin and OVERSEA CHINUNSPADR2 go up and down completely randomly.

Pair Corralation between Jiayin and OVERSEA CHINUNSPADR2

Given the investment horizon of 90 days Jiayin is expected to generate 1.15 times less return on investment than OVERSEA CHINUNSPADR2. In addition to that, Jiayin is 3.65 times more volatile than OVERSEA CHINUNSPADR2. It trades about 0.05 of its total potential returns per unit of risk. OVERSEA CHINUNSPADR2 is currently generating about 0.19 per unit of volatility. If you would invest  2,280  in OVERSEA CHINUNSPADR2 on October 5, 2024 and sell it today you would earn a total of  60.00  from holding OVERSEA CHINUNSPADR2 or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Jiayin Group  vs.  OVERSEA CHINUNSPADR2

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.

OVERSEA CHINUNSPADR2

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days OVERSEA CHINUNSPADR2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile fundamental drivers, OVERSEA CHINUNSPADR2 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and OVERSEA CHINUNSPADR2

The main advantage of trading using opposite Jiayin and OVERSEA CHINUNSPADR2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiayin position performs unexpectedly, OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR2 will offset losses from the drop in OVERSEA CHINUNSPADR2's long position.

The idea behind Jiayin Group and OVERSEA CHINUNSPADR2 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.