Correlation Between Jiayin and Vornado Realty

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

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

Diversification Opportunities for Jiayin and Vornado Realty

0.24

Correlation Coefficient

Jiayin  Vornado Realty

Modest diversification

The 3 months correlation between Jiayin and Vornado is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Vornado Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vornado Realty Trust 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 Vornado Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vornado Realty Trust has no effect on the direction of Jiayin i.e., Jiayin and Vornado Realty go up and down completely randomly.

Pair Corralation between Jiayin and Vornado Realty

Given the investment horizon of 90 days Jiayin Group is expected to generate 2.99 times more return on investment than Vornado Realty. However, Jiayin is 2.99 times more volatile than Vornado Realty Trust. It trades about 0.08 of its potential returns per unit of risk. Vornado Realty Trust is currently generating about 0.05 per unit of risk. If you would invest  214.00  in Jiayin Group on October 5, 2024 and sell it today you would earn a total of  442.00  from holding Jiayin Group or generate 206.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.78%
Values	Daily Returns

Jiayin Group  vs.  Vornado Realty Trust

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.

Vornado Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vornado Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Vornado Realty is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Jiayin and Vornado Realty

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

The idea behind Jiayin Group and Vornado Realty Trust 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.