Correlation Between Wah Fu and Jiayin
Can any of the company-specific risk be diversified away by investing in both Wah Fu and Jiayin 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 Wah Fu and Jiayin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Fu Education and Jiayin Group, you can compare the effects of market volatilities on Wah Fu and Jiayin 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 Wah Fu with a short position of Jiayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Fu and Jiayin.
Diversification Opportunities for Wah Fu and Jiayin
Average diversification
The 3 months correlation between Wah and Jiayin is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Wah Fu Education and Jiayin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiayin Group and Wah Fu 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 Wah Fu Education are associated (or correlated) with Jiayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiayin Group has no effect on the direction of Wah Fu i.e., Wah Fu and Jiayin go up and down completely randomly.
Pair Corralation between Wah Fu and Jiayin
Given the investment horizon of 90 days Wah Fu Education is expected to under-perform the Jiayin. But the stock apears to be less risky and, when comparing its historical volatility, Wah Fu Education is 1.06 times less risky than Jiayin. The stock trades about 0.0 of its potential returns per unit of risk. The Jiayin Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 557.00 in Jiayin Group on March 14, 2024 and sell it today you would earn a total of 141.00 from holding Jiayin Group or generate 25.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Wah Fu Education vs. Jiayin Group
Performance |
Timeline |
Wah Fu Education |
Jiayin Group |
Wah Fu and Jiayin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wah Fu and Jiayin
The main advantage of trading using opposite Wah Fu and Jiayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Fu position performs unexpectedly, Jiayin 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 Jiayin will offset losses from the drop in Jiayin's long position.The idea behind Wah Fu Education and Jiayin Group 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.Jiayin vs. Oriental Culture Holding | Jiayin vs. Wisekey International Holding | Jiayin vs. Wah Fu Education | Jiayin vs. Aquagold International |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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