Correlation Between Jiayin and Goldman Sachs

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

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

Diversification Opportunities for Jiayin and Goldman Sachs

0.44

Correlation Coefficient

Jiayin  Goldman Sachs

Very weak diversification

The 3 months correlation between Jiayin and Goldman is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Goldman Sachs Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Dynamic 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Dynamic has no effect on the direction of Jiayin i.e., Jiayin and Goldman Sachs go up and down completely randomly.

Pair Corralation between Jiayin and Goldman Sachs

Given the investment horizon of 90 days Jiayin Group is expected to generate 40.17 times more return on investment than Goldman Sachs. However, Jiayin is 40.17 times more volatile than Goldman Sachs Dynamic. It trades about 0.17 of its potential returns per unit of risk. Goldman Sachs Dynamic is currently generating about 0.09 per unit of risk. If you would invest  643.00  in Jiayin Group on December 21, 2024 and sell it today you would earn a total of  559.00  from holding Jiayin Group or generate 86.94% return on investment over 90 days.

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

Jiayin Group  vs.  Goldman Sachs Dynamic

Jiayin Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 13 (%) 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.

Goldman Sachs Dynamic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Dynamic are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jiayin and Goldman Sachs

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

The idea behind Jiayin Group and Goldman Sachs Dynamic 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.