Correlation Between JinkoSolar Holding and Xiaomi
Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and Xiaomi 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 Xiaomi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JinkoSolar Holding Co and Xiaomi, you can compare the effects of market volatilities on JinkoSolar Holding and Xiaomi 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 Xiaomi. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and Xiaomi.
Diversification Opportunities for JinkoSolar Holding and Xiaomi
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JinkoSolar and Xiaomi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding Co and Xiaomi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi 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 Co are associated (or correlated) with Xiaomi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiaomi has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Xiaomi go up and down completely randomly.
Pair Corralation between JinkoSolar Holding and Xiaomi
Assuming the 90 days trading horizon JinkoSolar Holding Co is expected to under-perform the Xiaomi. In addition to that, JinkoSolar Holding is 1.89 times more volatile than Xiaomi. It trades about -0.16 of its total potential returns per unit of risk. Xiaomi is currently generating about 0.22 per unit of volatility. If you would invest 306.00 in Xiaomi on August 28, 2024 and sell it today you would earn a total of 39.00 from holding Xiaomi or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JinkoSolar Holding Co vs. Xiaomi
Performance |
| Timeline |
| JinkoSolar Holding |
| Xiaomi |
JinkoSolar Holding and Xiaomi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JinkoSolar Holding and Xiaomi
The main advantage of trading using opposite JinkoSolar Holding and Xiaomi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, Xiaomi 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 Xiaomi will offset losses from the drop in Xiaomi's long position.| JinkoSolar Holding vs. Superior Plus Corp | JinkoSolar Holding vs. Origin Agritech | JinkoSolar Holding vs. Identiv | JinkoSolar Holding vs. INTUITIVE SURGICAL |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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