Correlation Between Jiayin and Zions Bancorporation

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

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

Diversification Opportunities for Jiayin and Zions Bancorporation

-0.65

Correlation Coefficient

Jiayin  Zions Bancorporation

Excellent diversification

The 3 months correlation between Jiayin and Zions is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Zions Bancorp. National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Jiayin i.e., Jiayin and Zions Bancorporation go up and down completely randomly.

Pair Corralation between Jiayin and Zions Bancorporation

Given the investment horizon of 90 days Jiayin Group is expected to generate 2.3 times more return on investment than Zions Bancorporation. However, Jiayin is 2.3 times more volatile than Zions Bancorporation National. It trades about 0.06 of its potential returns per unit of risk. Zions Bancorporation National is currently generating about 0.05 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	100.0%
Values	Daily Returns

Jiayin Group  vs.  Zions Bancorp. National

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.

Zions Bancorporation

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zions Bancorporation National are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Zions Bancorporation may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jiayin and Zions Bancorporation

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

The idea behind Jiayin Group and Zions Bancorporation National 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.