Correlation Between JinkoSolar Holding and BYD Company
Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and BYD Company 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 BYD Company 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 BYD Company Limited, you can compare the effects of market volatilities on JinkoSolar Holding and BYD Company 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 BYD Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and BYD Company.
Diversification Opportunities for JinkoSolar Holding and BYD Company
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JinkoSolar and BYD is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding Co and BYD Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Limited 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 BYD Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Limited has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and BYD Company go up and down completely randomly.
Pair Corralation between JinkoSolar Holding and BYD Company
Assuming the 90 days trading horizon JinkoSolar Holding Co is expected to generate 2.34 times more return on investment than BYD Company. However, JinkoSolar Holding is 2.34 times more volatile than BYD Company Limited. It trades about 0.11 of its potential returns per unit of risk. BYD Company Limited is currently generating about 0.15 per unit of risk. If you would invest 1,550 in JinkoSolar Holding Co on August 28, 2024 and sell it today you would earn a total of 590.00 from holding JinkoSolar Holding Co or generate 38.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JinkoSolar Holding Co vs. BYD Company Limited
Performance |
| Timeline |
| JinkoSolar Holding |
| BYD Limited |
JinkoSolar Holding and BYD Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JinkoSolar Holding and BYD Company
The main advantage of trading using opposite JinkoSolar Holding and BYD Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, BYD Company 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 BYD Company will offset losses from the drop in BYD Company's long position.| JinkoSolar Holding vs. Superior Plus Corp | JinkoSolar Holding vs. Origin Agritech | JinkoSolar Holding vs. Identiv | JinkoSolar Holding vs. INTUITIVE SURGICAL |
| BYD Company vs. Superior Plus Corp | BYD Company vs. NMI Holdings | BYD Company vs. Origin Agritech | BYD Company 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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