Correlation Between BYD Company and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both BYD Company 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 BYD Company and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYD Company Limited and JinkoSolar Holding Co, you can compare the effects of market volatilities on BYD Company 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 BYD Company with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYD Company and JinkoSolar Holding.
Diversification Opportunities for BYD Company and JinkoSolar Holding
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BYD and JinkoSolar is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BYD Company Limited and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and BYD Company 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 BYD Company Limited 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 BYD Company i.e., BYD Company and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between BYD Company and JinkoSolar Holding
Assuming the 90 days horizon BYD Company Limited is expected to under-perform the JinkoSolar Holding. But the stock apears to be less risky and, when comparing its historical volatility, BYD Company Limited is 2.66 times less risky than JinkoSolar Holding. The stock trades about -0.12 of its potential returns per unit of risk. The JinkoSolar Holding Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,545 in JinkoSolar Holding Co on September 5, 2024 and sell it today you would lose (170.00) from holding JinkoSolar Holding Co or give up 6.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BYD Company Limited vs. JinkoSolar Holding Co
Performance |
| Timeline |
| BYD Limited |
| JinkoSolar Holding |
BYD Company and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYD Company and JinkoSolar Holding
The main advantage of trading using opposite BYD Company and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYD Company 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.| BYD Company vs. Xiaomi | BYD Company vs. Geely Automobile Holdings | BYD Company vs. Nel ASA | BYD Company vs. JinkoSolar Holding Co |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |