Correlation Between Trump Media and Jiayin

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

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

Diversification Opportunities for Trump Media and Jiayin

-0.31

Correlation Coefficient

Trump Media  Jiayin

Very good diversification

The 3 months correlation between Trump and Jiayin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Trump Media Technology and Jiayin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiayin Group and Trump Media 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 Trump Media Technology 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 Trump Media i.e., Trump Media and Jiayin go up and down completely randomly.

Pair Corralation between Trump Media and Jiayin

Considering the 90-day investment horizon Trump Media Technology is expected to generate 1.02 times more return on investment than Jiayin. However, Trump Media is 1.02 times more volatile than Jiayin Group. It trades about 0.28 of its potential returns per unit of risk. Jiayin Group is currently generating about 0.08 per unit of risk. If you would invest  3,051  in Trump Media Technology on September 27, 2024 and sell it today you would earn a total of  631.50  from holding Trump Media Technology or generate 20.7% return on investment over 90 days.

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

Trump Media Technology  vs.  Jiayin Group

Trump Media Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Trump Media Technology are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward-looking indicators, Trump Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

Jiayin Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiayin Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Jiayin is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Trump Media and Jiayin

The main advantage of trading using opposite Trump Media and Jiayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trump Media 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 Trump Media Technology 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.