Correlation Between Jiayin and Quantum EMotion

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

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

Diversification Opportunities for Jiayin and Quantum EMotion

-0.21

Correlation Coefficient

Jiayin  Quantum EMotion

Very good diversification

The 3 months correlation between Jiayin and Quantum is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Quantum eMotion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum eMotion 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 Quantum EMotion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum eMotion has no effect on the direction of Jiayin i.e., Jiayin and Quantum EMotion go up and down completely randomly.

Pair Corralation between Jiayin and Quantum EMotion

Given the investment horizon of 90 days Jiayin is expected to generate 130.44 times less return on investment than Quantum EMotion. But when comparing it to its historical volatility, Jiayin Group is 12.78 times less risky than Quantum EMotion. It trades about 0.05 of its potential returns per unit of risk. Quantum eMotion is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Quantum eMotion on October 5, 2024 and sell it today you would earn a total of  112.00  from holding Quantum eMotion or generate 933.33% 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.  Quantum eMotion

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.

Quantum eMotion

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum eMotion are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Quantum EMotion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Quantum EMotion

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

The idea behind Jiayin Group and Quantum eMotion 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.

Check out your portfolio center.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .