Correlation Between Jiayin and ProShares

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

By analyzing existing cross correlation between Jiayin Group and ProShares SP 500, you can compare the effects of market volatilities on Jiayin and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and ProShares.

Diversification Opportunities for Jiayin and ProShares

-0.42

Correlation Coefficient

Jiayin  ProShares

Very good diversification

The 3 months correlation between Jiayin and ProShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of Jiayin i.e., Jiayin and ProShares go up and down completely randomly.

Pair Corralation between Jiayin and ProShares

Given the investment horizon of 90 days Jiayin Group is expected to generate 3.31 times more return on investment than ProShares. However, Jiayin is 3.31 times more volatile than ProShares SP 500. It trades about 0.09 of its potential returns per unit of risk. ProShares SP 500 is currently generating about -0.11 per unit of risk. If you would invest  627.00  in Jiayin Group on October 6, 2024 and sell it today you would earn a total of  29.00  from holding Jiayin Group or generate 4.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Jiayin Group  vs.  ProShares SP 500

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.

ProShares SP 500

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares SP 500 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ProShares is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Jiayin and ProShares

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

The idea behind Jiayin Group and ProShares SP 500 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.