Correlation Between Jiayin and SK Telecom

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

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

Diversification Opportunities for Jiayin and SK Telecom

-0.29

Correlation Coefficient

Jiayin  SK Telecom

Very good diversification

The 3 months correlation between Jiayin and S1KM34 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and SK Telecom Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom Co, 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 SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom Co, has no effect on the direction of Jiayin i.e., Jiayin and SK Telecom go up and down completely randomly.

Pair Corralation between Jiayin and SK Telecom

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.93 times more return on investment than SK Telecom. However, Jiayin is 1.93 times more volatile than SK Telecom Co,. It trades about 0.03 of its potential returns per unit of risk. SK Telecom Co, is currently generating about 0.04 per unit of risk. If you would invest  646.00  in Jiayin Group on October 7, 2024 and sell it today you would earn a total of  7.00  from holding Jiayin Group or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.68%
Values	Daily Returns

Jiayin Group  vs.  SK Telecom Co,

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.

SK Telecom Co,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SK Telecom Co, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, SK Telecom is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jiayin and SK Telecom

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

The idea behind Jiayin Group and SK Telecom Co, 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.