Correlation Between American Lithium and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both American Lithium and JinkoSolar Holding 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 American Lithium and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Lithium Corp and JinkoSolar Holding Co, you can compare the effects of market volatilities on American Lithium and JinkoSolar Holding 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 American Lithium with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Lithium and JinkoSolar Holding.
Diversification Opportunities for American Lithium and JinkoSolar Holding
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and JinkoSolar is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding American Lithium Corp and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and American Lithium 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 American Lithium Corp are associated (or correlated) with JinkoSolar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JinkoSolar Holding has no effect on the direction of American Lithium i.e., American Lithium and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between American Lithium and JinkoSolar Holding
Assuming the 90 days trading horizon American Lithium Corp is expected to generate 0.98 times more return on investment than JinkoSolar Holding. However, American Lithium Corp is 1.02 times less risky than JinkoSolar Holding. It trades about 0.01 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about -0.04 per unit of risk. If you would invest 62.00 in American Lithium Corp on September 5, 2024 and sell it today you would lose (1.00) from holding American Lithium Corp or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Lithium Corp vs. JinkoSolar Holding Co
Performance |
| Timeline |
| American Lithium Corp |
| JinkoSolar Holding |
American Lithium and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Lithium and JinkoSolar Holding
The main advantage of trading using opposite American Lithium and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Lithium position performs unexpectedly, JinkoSolar Holding 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 JinkoSolar Holding will offset losses from the drop in JinkoSolar Holding's long position.| American Lithium vs. Standard Lithium | American Lithium vs. BYD Company Limited | American Lithium vs. Rock Tech Lithium |
| JinkoSolar Holding vs. Superior Plus Corp | JinkoSolar Holding vs. NMI Holdings | JinkoSolar Holding vs. Origin Agritech | JinkoSolar Holding vs. SIVERS SEMICONDUCTORS AB |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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