Correlation Between Genius Sports and Jiayin

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

By analyzing existing cross correlation between Genius Sports and Jiayin Group, you can compare the effects of market volatilities on Genius Sports and Jiayin 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 Genius Sports with a short position of Jiayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genius Sports and Jiayin.

Diversification Opportunities for Genius Sports and Jiayin

-0.36

Correlation Coefficient

Genius Sports  Jiayin

Very good diversification

The 3 months correlation between Genius and Jiayin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and Jiayin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiayin Group and Genius Sports 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 Genius Sports are associated (or correlated) with Jiayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiayin Group has no effect on the direction of Genius Sports i.e., Genius Sports and Jiayin go up and down completely randomly.

Pair Corralation between Genius Sports and Jiayin

Given the investment horizon of 90 days Genius Sports is expected to generate 1.44 times less return on investment than Jiayin. But when comparing it to its historical volatility, Genius Sports is 1.16 times less risky than Jiayin. It trades about 0.06 of its potential returns per unit of risk. Jiayin Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  562.00  in Jiayin Group on September 21, 2024 and sell it today you would earn a total of  85.00  from holding Jiayin Group or generate 15.12% return on investment over 90 days.

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

Genius Sports  vs.  Jiayin Group

Genius Sports

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Sports are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Genius Sports demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Jiayin Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jiayin Group are ranked lower than 6 (%) 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.

Pair Trading with Genius Sports and Jiayin

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

The idea behind Genius Sports and Jiayin Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.