Correlation Between PennyMac Mortgage and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both PennyMac Mortgage 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 PennyMac Mortgage and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennyMac Mortgage Investment and JinkoSolar Holding Co, you can compare the effects of market volatilities on PennyMac Mortgage 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 PennyMac Mortgage with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Mortgage and JinkoSolar Holding.
Diversification Opportunities for PennyMac Mortgage and JinkoSolar Holding
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PennyMac and JinkoSolar is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Mortgage Investment and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and PennyMac Mortgage 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 PennyMac Mortgage Investment 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 PennyMac Mortgage i.e., PennyMac Mortgage and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between PennyMac Mortgage and JinkoSolar Holding
Assuming the 90 days horizon PennyMac Mortgage Investment is expected to generate 0.36 times more return on investment than JinkoSolar Holding. However, PennyMac Mortgage Investment is 2.74 times less risky than JinkoSolar Holding. It trades about 0.08 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about -0.11 per unit of risk. If you would invest 1,330 in PennyMac Mortgage Investment on December 26, 2024 and sell it today you would earn a total of 30.00 from holding PennyMac Mortgage Investment or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PennyMac Mortgage Investment vs. JinkoSolar Holding Co
Performance |
| Timeline |
| PennyMac Mortgage |
| JinkoSolar Holding |
PennyMac Mortgage and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Mortgage and JinkoSolar Holding
The main advantage of trading using opposite PennyMac Mortgage and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Mortgage 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.| PennyMac Mortgage vs. China BlueChemical | PennyMac Mortgage vs. EITZEN CHEMICALS | PennyMac Mortgage vs. INDO RAMA SYNTHETIC | PennyMac Mortgage vs. Mitsui Chemicals |
| JinkoSolar Holding vs. CN DATANG C | JinkoSolar Holding vs. Ebro Foods SA | JinkoSolar Holding vs. Lifeway Foods | JinkoSolar Holding vs. DaChan Food Limited |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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