Correlation Between Fiverr International and Jiayin

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

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

Diversification Opportunities for Fiverr International and Jiayin

-0.14

Correlation Coefficient

Fiverr International  Jiayin

Good diversification

The 3 months correlation between Fiverr and Jiayin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and Jiayin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiayin Group and Fiverr 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 Fiverr International 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 Fiverr International i.e., Fiverr International and Jiayin go up and down completely randomly.

Pair Corralation between Fiverr International and Jiayin

Given the investment horizon of 90 days Fiverr International is expected to generate 1.41 times less return on investment than Jiayin. But when comparing it to its historical volatility, Fiverr International is 1.08 times less risky than Jiayin. It trades about 0.03 of its potential returns per unit of risk. Jiayin Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  484.00  in Jiayin Group on August 31, 2024 and sell it today you would earn a total of  163.00  from holding Jiayin Group or generate 33.68% return on investment over 90 days.

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

Fiverr International  vs.  Jiayin Group

Fiverr International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fiverr International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fiverr International reported solid returns over the last few months and may actually be approaching a breakup point.

Jiayin Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Jiayin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fiverr International and Jiayin

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

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.