Correlation Between Standard Lithium and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both Standard Lithium 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 Standard Lithium and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Lithium and JinkoSolar Holding Co, you can compare the effects of market volatilities on Standard Lithium 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 Standard Lithium with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Lithium and JinkoSolar Holding.
Diversification Opportunities for Standard Lithium and JinkoSolar Holding
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Standard and JinkoSolar is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Standard Lithium and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Standard Lithium 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 Standard Lithium 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 Standard Lithium i.e., Standard Lithium and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between Standard Lithium and JinkoSolar Holding
Assuming the 90 days horizon Standard Lithium is expected to under-perform the JinkoSolar Holding. In addition to that, Standard Lithium is 1.14 times more volatile than JinkoSolar Holding Co. It trades about -0.01 of its total potential returns per unit of risk. JinkoSolar Holding Co is currently generating about 0.01 per unit of volatility. If you would invest 3,412 in JinkoSolar Holding Co on September 13, 2024 and sell it today you would lose (662.00) from holding JinkoSolar Holding Co or give up 19.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Lithium vs. JinkoSolar Holding Co
Performance |
| Timeline |
| Standard Lithium |
| JinkoSolar Holding |
Standard Lithium and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Lithium and JinkoSolar Holding
The main advantage of trading using opposite Standard Lithium and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Lithium 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.| Standard Lithium vs. BYD Company Limited | Standard Lithium vs. JinkoSolar Holding Co | Standard Lithium vs. American Lithium Corp | Standard Lithium vs. Samsung SDI Co |
| JinkoSolar Holding vs. International Consolidated Airlines | JinkoSolar Holding vs. FUYO GENERAL LEASE | JinkoSolar Holding vs. GRIFFIN MINING LTD | JinkoSolar Holding vs. Jacquet Metal Service |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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