Correlation Between Jiayin and 29670GAG7

Can any of the company-specific risk be diversified away by investing in both Jiayin and 29670GAG7 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 29670GAG7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiayin Group and WTRG 53 01 MAY 52, you can compare the effects of market volatilities on Jiayin and 29670GAG7 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 29670GAG7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and 29670GAG7.

Diversification Opportunities for Jiayin and 29670GAG7

0.66

Correlation Coefficient

Jiayin  29670GAG7

Poor diversification

The 3 months correlation between Jiayin and 29670GAG7 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and WTRG 53 01 MAY 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WTRG 53 01 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 29670GAG7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WTRG 53 01 has no effect on the direction of Jiayin i.e., Jiayin and 29670GAG7 go up and down completely randomly.

Pair Corralation between Jiayin and 29670GAG7

Given the investment horizon of 90 days Jiayin Group is expected to under-perform the 29670GAG7. In addition to that, Jiayin is 2.89 times more volatile than WTRG 53 01 MAY 52. It trades about -0.07 of its total potential returns per unit of risk. WTRG 53 01 MAY 52 is currently generating about -0.03 per unit of volatility. If you would invest  9,711  in WTRG 53 01 MAY 52 on October 5, 2024 and sell it today you would lose (229.00) from holding WTRG 53 01 MAY 52 or give up 2.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	83.61%
Values	Daily Returns

Jiayin Group  vs.  WTRG 53 01 MAY 52

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.

WTRG 53 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WTRG 53 01 MAY 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 29670GAG7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jiayin and 29670GAG7

The main advantage of trading using opposite Jiayin and 29670GAG7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiayin position performs unexpectedly, 29670GAG7 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 29670GAG7 will offset losses from the drop in 29670GAG7's long position.

The idea behind Jiayin Group and WTRG 53 01 MAY 52 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.