Correlation Between Jiayin and BankInvest Optima

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

By analyzing existing cross correlation between Jiayin Group and BankInvest Optima 30, you can compare the effects of market volatilities on Jiayin and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and BankInvest Optima.

Diversification Opportunities for Jiayin and BankInvest Optima

-0.56

Correlation Coefficient

Jiayin  BankInvest Optima

Excellent diversification

The 3 months correlation between Jiayin and BankInvest is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Jiayin i.e., Jiayin and BankInvest Optima go up and down completely randomly.

Pair Corralation between Jiayin and BankInvest Optima

Given the investment horizon of 90 days Jiayin Group is expected to generate 11.32 times more return on investment than BankInvest Optima. However, Jiayin is 11.32 times more volatile than BankInvest Optima 30. It trades about 0.06 of its potential returns per unit of risk. BankInvest Optima 30 is currently generating about 0.09 per unit of risk. If you would invest  273.00  in Jiayin Group on October 4, 2024 and sell it today you would earn a total of  382.00  from holding Jiayin Group or generate 139.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.98%
Values	Daily Returns

Jiayin Group  vs.  BankInvest Optima 30

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 latest fragile performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

BankInvest Optima

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BankInvest Optima 30 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, BankInvest Optima is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Jiayin and BankInvest Optima

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

The idea behind Jiayin Group and BankInvest Optima 30 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.