Correlation Between Jiayin and Yelp
Can any of the company-specific risk be diversified away by investing in both Jiayin and Yelp 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 Yelp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiayin Group and Yelp Inc, you can compare the effects of market volatilities on Jiayin and Yelp 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 Yelp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and Yelp.
Diversification Opportunities for Jiayin and Yelp
Average diversification
The 3 months correlation between Jiayin and Yelp is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc 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 Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of Jiayin i.e., Jiayin and Yelp go up and down completely randomly.
Pair Corralation between Jiayin and Yelp
Given the investment horizon of 90 days Jiayin is expected to generate 1.98 times less return on investment than Yelp. In addition to that, Jiayin is 1.86 times more volatile than Yelp Inc. It trades about 0.06 of its total potential returns per unit of risk. Yelp Inc is currently generating about 0.23 per unit of volatility. If you would invest 3,451 in Yelp Inc on August 31, 2024 and sell it today you would earn a total of 357.00 from holding Yelp Inc or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiayin Group vs. Yelp Inc
Performance |
| Timeline |
| Jiayin Group |
| Yelp Inc |
Jiayin and Yelp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiayin and Yelp
The main advantage of trading using opposite Jiayin and Yelp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiayin position performs unexpectedly, Yelp 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 Yelp will offset losses from the drop in Yelp'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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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