Correlation Between FirstCash and Jiayin

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

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

Diversification Opportunities for FirstCash and Jiayin

0.55

Correlation Coefficient

FirstCash  Jiayin

Very weak diversification

The 3 months correlation between FirstCash and Jiayin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Jiayin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiayin Group and FirstCash 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 FirstCash 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 FirstCash i.e., FirstCash and Jiayin go up and down completely randomly.

Pair Corralation between FirstCash and Jiayin

Given the investment horizon of 90 days FirstCash is expected to generate 6.15 times less return on investment than Jiayin. But when comparing it to its historical volatility, FirstCash is 2.75 times less risky than Jiayin. It trades about 0.03 of its potential returns per unit of risk. Jiayin Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  258.00  in Jiayin Group on September 28, 2024 and sell it today you would earn a total of  397.00  from holding Jiayin Group or generate 153.88% return on investment over 90 days.

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

FirstCash  vs.  Jiayin Group

FirstCash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FirstCash has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Jiayin Group

Risk-Adjusted Performance

0 of 100

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 FirstCash and Jiayin

The main advantage of trading using opposite FirstCash and Jiayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash 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 FirstCash 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.