Correlation Between Jiayin and Royal Bank

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

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

Diversification Opportunities for Jiayin and Royal Bank

-0.78

Correlation Coefficient

Jiayin  Royal Bank

Pay attention - limited upside

The 3 months correlation between Jiayin and Royal is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Royal Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Bank 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 Royal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Bank has no effect on the direction of Jiayin i.e., Jiayin and Royal Bank go up and down completely randomly.

Pair Corralation between Jiayin and Royal Bank

Given the investment horizon of 90 days Jiayin Group is expected to generate 8.16 times more return on investment than Royal Bank. However, Jiayin is 8.16 times more volatile than Royal Bank of. It trades about 0.05 of its potential returns per unit of risk. Royal Bank of is currently generating about 0.16 per unit of risk. If you would invest  496.00  in Jiayin Group on October 6, 2024 and sell it today you would earn a total of  160.00  from holding Jiayin Group or generate 32.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Jiayin Group  vs.  Royal Bank of

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.

Royal Bank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Royal Bank of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Royal Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jiayin and Royal Bank

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

The idea behind Jiayin Group and Royal Bank of 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.