Correlation Between Jiayin and WD-40 CO

Can any of the company-specific risk be diversified away by investing in both Jiayin and WD-40 CO 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 WD-40 CO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiayin Group and WD 40 CO, you can compare the effects of market volatilities on Jiayin and WD-40 CO 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 WD-40 CO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and WD-40 CO.

Diversification Opportunities for Jiayin and WD-40 CO

-0.51

Correlation Coefficient

Jiayin  WD-40 CO

Excellent diversification

The 3 months correlation between Jiayin and WD-40 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and WD 40 CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WD 40 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 WD-40 CO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WD 40 CO has no effect on the direction of Jiayin i.e., Jiayin and WD-40 CO go up and down completely randomly.

Pair Corralation between Jiayin and WD-40 CO

Given the investment horizon of 90 days Jiayin Group is expected to under-perform the WD-40 CO. In addition to that, Jiayin is 1.88 times more volatile than WD 40 CO. It trades about -0.07 of its total potential returns per unit of risk. WD 40 CO is currently generating about 0.01 per unit of volatility. If you would invest  22,917  in WD 40 CO on October 7, 2024 and sell it today you would earn a total of  83.00  from holding WD 40 CO or generate 0.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Jiayin Group  vs.  WD 40 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 weak 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.

WD 40 CO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WD 40 CO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WD-40 CO is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jiayin and WD-40 CO

The main advantage of trading using opposite Jiayin and WD-40 CO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiayin position performs unexpectedly, WD-40 CO 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 WD-40 CO will offset losses from the drop in WD-40 CO's long position.

The idea behind Jiayin Group and WD 40 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.