Correlation Between Jiayin and Morgan Stanley

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

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

Diversification Opportunities for Jiayin and Morgan Stanley

-0.63

Correlation Coefficient

Jiayin  Morgan Stanley

Excellent diversification

The 3 months correlation between Jiayin and Morgan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Morgan Stanley Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Insti 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 Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Insti has no effect on the direction of Jiayin i.e., Jiayin and Morgan Stanley go up and down completely randomly.

Pair Corralation between Jiayin and Morgan Stanley

Given the investment horizon of 90 days Jiayin Group is expected to generate 4.63 times more return on investment than Morgan Stanley. However, Jiayin is 4.63 times more volatile than Morgan Stanley Institutional. It trades about 0.06 of its potential returns per unit of risk. Morgan Stanley Institutional is currently generating about 0.02 per unit of risk. If you would invest  259.00  in Jiayin Group on October 5, 2024 and sell it today you would earn a total of  397.00  from holding Jiayin Group or generate 153.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.0%
Values	Daily Returns

Jiayin Group  vs.  Morgan Stanley Institutional

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 fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Morgan Stanley Insti

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley Institutional are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Morgan Stanley 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 Morgan Stanley

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

The idea behind Jiayin Group and Morgan Stanley Institutional 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.