Correlation Between Iridium Communications and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both Iridium Communications 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 Iridium Communications and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iridium Communications and JinkoSolar Holding Co, you can compare the effects of market volatilities on Iridium Communications 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 Iridium Communications with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iridium Communications and JinkoSolar Holding.
Diversification Opportunities for Iridium Communications and JinkoSolar Holding
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iridium and JinkoSolar is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Iridium Communications and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Iridium Communications 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 Iridium Communications 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 Iridium Communications i.e., Iridium Communications and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between Iridium Communications and JinkoSolar Holding
Assuming the 90 days horizon Iridium Communications is expected to generate 0.52 times more return on investment than JinkoSolar Holding. However, Iridium Communications is 1.91 times less risky than JinkoSolar Holding. It trades about 0.1 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about -0.16 per unit of risk. If you would invest 2,684 in Iridium Communications on August 29, 2024 and sell it today you would earn a total of 139.00 from holding Iridium Communications or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iridium Communications vs. JinkoSolar Holding Co
Performance |
| Timeline |
| Iridium Communications |
| JinkoSolar Holding |
Iridium Communications and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iridium Communications and JinkoSolar Holding
The main advantage of trading using opposite Iridium Communications and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iridium Communications 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.| Iridium Communications vs. T Mobile | Iridium Communications vs. ATT Inc | Iridium Communications vs. Deutsche Telekom AG |
| JinkoSolar Holding vs. Superior Plus Corp | JinkoSolar Holding vs. Origin Agritech | JinkoSolar Holding vs. Identiv | JinkoSolar Holding vs. INTUITIVE SURGICAL |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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