Correlation Between Enphase Energy and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both Enphase Energy 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 Enphase Energy and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and JinkoSolar Holding, you can compare the effects of market volatilities on Enphase Energy 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 Enphase Energy with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and JinkoSolar Holding.
Diversification Opportunities for Enphase Energy and JinkoSolar Holding
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enphase and JinkoSolar is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and JinkoSolar Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Enphase Energy 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 Enphase Energy 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 Enphase Energy i.e., Enphase Energy and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between Enphase Energy and JinkoSolar Holding
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the JinkoSolar Holding. But the stock apears to be less risky and, when comparing its historical volatility, Enphase Energy is 1.09 times less risky than JinkoSolar Holding. The stock trades about -0.06 of its potential returns per unit of risk. The JinkoSolar Holding is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,374 in JinkoSolar Holding on August 30, 2024 and sell it today you would lose (2,116) from holding JinkoSolar Holding or give up 48.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. JinkoSolar Holding
Performance |
| Timeline |
| Enphase Energy |
| JinkoSolar Holding |
Enphase Energy and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and JinkoSolar Holding
The main advantage of trading using opposite Enphase Energy and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy 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.| Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
| JinkoSolar Holding vs. First Solar | JinkoSolar Holding vs. SolarEdge Technologies | JinkoSolar Holding vs. Sunrun Inc | JinkoSolar Holding vs. Sunnova Energy International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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