Correlation Between Jiayin and United Natural

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

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

Diversification Opportunities for Jiayin and United Natural

-0.02

Correlation Coefficient

Jiayin  United Natural

Good diversification

The 3 months correlation between Jiayin and United is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and United Natural Foods, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods, 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 United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods, has no effect on the direction of Jiayin i.e., Jiayin and United Natural go up and down completely randomly.

Pair Corralation between Jiayin and United Natural

Given the investment horizon of 90 days Jiayin Group is expected to generate 1.65 times more return on investment than United Natural. However, Jiayin is 1.65 times more volatile than United Natural Foods,. It trades about 0.31 of its potential returns per unit of risk. United Natural Foods, is currently generating about 0.12 per unit of risk. If you would invest  643.00  in Jiayin Group on October 22, 2024 and sell it today you would earn a total of  87.00  from holding Jiayin Group or generate 13.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Jiayin Group  vs.  United Natural Foods,

Jiayin Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Jiayin may actually be approaching a critical reversion point that can send shares even higher in February 2025.

United Natural Foods,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, United Natural sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and United Natural

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

The idea behind Jiayin Group and United Natural Foods, 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.