Correlation Between Nippon Steel and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both Nippon Steel 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 Nippon Steel and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Steel and JinkoSolar Holding Co, you can compare the effects of market volatilities on Nippon Steel 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 Nippon Steel with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Steel and JinkoSolar Holding.
Diversification Opportunities for Nippon Steel and JinkoSolar Holding
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nippon and JinkoSolar is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Steel and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Nippon Steel 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 Nippon Steel 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 Nippon Steel i.e., Nippon Steel and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between Nippon Steel and JinkoSolar Holding
Assuming the 90 days trading horizon Nippon Steel is expected to generate 0.45 times more return on investment than JinkoSolar Holding. However, Nippon Steel is 2.23 times less risky than JinkoSolar Holding. It trades about 0.03 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about -0.01 per unit of risk. If you would invest 1,548 in Nippon Steel on September 3, 2024 and sell it today you would earn a total of 363.00 from holding Nippon Steel or generate 23.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nippon Steel vs. JinkoSolar Holding Co
Performance |
| Timeline |
| Nippon Steel |
| JinkoSolar Holding |
Nippon Steel and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Steel and JinkoSolar Holding
The main advantage of trading using opposite Nippon Steel and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Steel 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.| Nippon Steel vs. MAGNUM MINING EXP | Nippon Steel vs. Perseus Mining Limited | Nippon Steel vs. Apollo Medical Holdings | Nippon Steel vs. G III Apparel Group |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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