Correlation Between Jiayin and Hello
Can any of the company-specific risk be diversified away by investing in both Jiayin and Hello 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 Hello into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiayin Group and Hello Group, you can compare the effects of market volatilities on Jiayin and Hello 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 Hello. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and Hello.
Diversification Opportunities for Jiayin and Hello
Very poor diversification
The 3 months correlation between Jiayin and Hello is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Hello Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hello Group 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 Hello. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hello Group has no effect on the direction of Jiayin i.e., Jiayin and Hello go up and down completely randomly.
Pair Corralation between Jiayin and Hello
Given the investment horizon of 90 days Jiayin Group is expected to generate 1.16 times more return on investment than Hello. However, Jiayin is 1.16 times more volatile than Hello Group. It trades about 0.05 of its potential returns per unit of risk. Hello Group is currently generating about 0.02 per unit of risk. If you would invest 444.00 in Jiayin Group on August 24, 2024 and sell it today you would earn a total of 140.00 from holding Jiayin Group or generate 31.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiayin Group vs. Hello Group
Performance |
| Timeline |
| Jiayin Group |
| Hello Group |
Jiayin and Hello Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiayin and Hello
The main advantage of trading using opposite Jiayin and Hello positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiayin position performs unexpectedly, Hello 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 Hello will offset losses from the drop in Hello's long position.| Jiayin vs. Oriental Culture Holding | Jiayin vs. Wisekey International Holding | Jiayin vs. Wah Fu Education |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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