Correlation Between Wisekey International and Jiayin

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

By analyzing existing cross correlation between Wisekey International Holding and Jiayin Group, you can compare the effects of market volatilities on Wisekey International 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 Wisekey International with a short position of Jiayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and Jiayin.

Diversification Opportunities for Wisekey International and Jiayin

0.32

Correlation Coefficient

Wisekey International  Jiayin

Weak diversification

The 3 months correlation between Wisekey and Jiayin is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and Jiayin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiayin Group and Wisekey International 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 Wisekey International Holding 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 Wisekey International i.e., Wisekey International and Jiayin go up and down completely randomly.

Pair Corralation between Wisekey International and Jiayin

Given the investment horizon of 90 days Wisekey International Holding is expected to under-perform the Jiayin. In addition to that, Wisekey International is 1.5 times more volatile than Jiayin Group. It trades about -0.03 of its total potential returns per unit of risk. Jiayin Group is currently generating about 0.02 per unit of volatility. If you would invest  687.00  in Jiayin Group on March 14, 2024 and sell it today you would earn a total of  11.00  from holding Jiayin Group or generate 1.6% return on investment over 90 days.

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

Wisekey International Holding  vs.  Jiayin Group

Wisekey International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisekey International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Jiayin Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Jiayin is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Wisekey International and Jiayin

The main advantage of trading using opposite Wisekey International and Jiayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International 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 Wisekey International Holding 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.