Correlation Between Jiayin and Asset Entities

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

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

Diversification Opportunities for Jiayin and Asset Entities

0.4

Correlation Coefficient

Jiayin  Asset Entities

Very weak diversification

The 3 months correlation between Jiayin and Asset is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Asset Entities Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asset Entities Class 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 Asset Entities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asset Entities Class has no effect on the direction of Jiayin i.e., Jiayin and Asset Entities go up and down completely randomly.

Pair Corralation between Jiayin and Asset Entities

Given the investment horizon of 90 days Jiayin is expected to generate 1.13 times less return on investment than Asset Entities. But when comparing it to its historical volatility, Jiayin Group is 4.83 times less risky than Asset Entities. It trades about 0.08 of its potential returns per unit of risk. Asset Entities Class is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  56.00  in Asset Entities Class on September 27, 2024 and sell it today you would lose (7.80) from holding Asset Entities Class or give up 13.93% of portfolio value over 90 days.

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

Jiayin Group  vs.  Asset Entities Class

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 very healthy forward indicators, Jiayin is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Asset Entities Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asset Entities Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Jiayin and Asset Entities

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

The idea behind Jiayin Group and Asset Entities Class 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.