Correlation Between Jiayin and Vanguard Funds

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

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

Diversification Opportunities for Jiayin and Vanguard Funds

-0.35

Correlation Coefficient

Jiayin  Vanguard Funds

Very good diversification

The 3 months correlation between Jiayin and Vanguard is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Vanguard Funds PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Funds PLC 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 Vanguard Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Funds PLC has no effect on the direction of Jiayin i.e., Jiayin and Vanguard Funds go up and down completely randomly.

Pair Corralation between Jiayin and Vanguard Funds

Given the investment horizon of 90 days Jiayin Group is expected to under-perform the Vanguard Funds. In addition to that, Jiayin is 5.71 times more volatile than Vanguard Funds PLC. It trades about -0.05 of its total potential returns per unit of risk. Vanguard Funds PLC is currently generating about 0.11 per unit of volatility. If you would invest  3,497  in Vanguard Funds PLC on October 4, 2024 and sell it today you would earn a total of  145.00  from holding Vanguard Funds PLC or generate 4.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Jiayin Group  vs.  Vanguard Funds PLC

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 latest fragile performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Vanguard Funds PLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Funds PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vanguard Funds is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jiayin and Vanguard Funds

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

The idea behind Jiayin Group and Vanguard Funds PLC 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.