Correlation Between Jiayin and Opera

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

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

Diversification Opportunities for Jiayin and Opera

0.12

Correlation Coefficient

Jiayin  Opera

Average diversification

The 3 months correlation between Jiayin and Opera is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Opera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opera and Jiayin 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 Jiayin Group are associated (or correlated) with Opera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opera has no effect on the direction of Jiayin i.e., Jiayin and Opera go up and down completely randomly.

Pair Corralation between Jiayin and Opera

Given the investment horizon of 90 days Jiayin is expected to generate 1.07 times less return on investment than Opera. In addition to that, Jiayin is 1.49 times more volatile than Opera. It trades about 0.13 of its total potential returns per unit of risk. Opera is currently generating about 0.2 per unit of volatility. If you would invest  1,442  in Opera on August 31, 2024 and sell it today you would earn a total of  517.00  from holding Opera or generate 35.85% return on investment over 90 days.

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

Jiayin Group  vs.  Opera

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.

Opera

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Opera are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Opera sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiayin and Opera

The main advantage of trading using opposite Jiayin and Opera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiayin position performs unexpectedly, Opera 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 Opera will offset losses from the drop in Opera's long position.

The idea behind Jiayin Group and Opera 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.