Correlation Between JinkoSolar Holding and Daqo New
Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and Daqo New 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 JinkoSolar Holding and Daqo New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JinkoSolar Holding and Daqo New Energy, you can compare the effects of market volatilities on JinkoSolar Holding and Daqo New 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 JinkoSolar Holding with a short position of Daqo New. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and Daqo New.
Diversification Opportunities for JinkoSolar Holding and Daqo New
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JinkoSolar and Daqo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Daqo New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daqo New Energy and JinkoSolar Holding 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 JinkoSolar Holding are associated (or correlated) with Daqo New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daqo New Energy has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Daqo New go up and down completely randomly.
Pair Corralation between JinkoSolar Holding and Daqo New
Considering the 90-day investment horizon JinkoSolar Holding is expected to generate 0.86 times more return on investment than Daqo New. However, JinkoSolar Holding is 1.17 times less risky than Daqo New. It trades about -0.19 of its potential returns per unit of risk. Daqo New Energy is currently generating about -0.3 per unit of risk. If you would invest 2,770 in JinkoSolar Holding on August 27, 2024 and sell it today you would lose (606.00) from holding JinkoSolar Holding or give up 21.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JinkoSolar Holding vs. Daqo New Energy
Performance |
| Timeline |
| JinkoSolar Holding |
| Daqo New Energy |
JinkoSolar Holding and Daqo New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JinkoSolar Holding and Daqo New
The main advantage of trading using opposite JinkoSolar Holding and Daqo New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, Daqo New 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 Daqo New will offset losses from the drop in Daqo New's long position.| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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