Correlation Between JinkoSolar Holding and SMA Solar
Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and SMA Solar 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 SMA Solar 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 SMA Solar Technology, you can compare the effects of market volatilities on JinkoSolar Holding and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and SMA Solar.
Diversification Opportunities for JinkoSolar Holding and SMA Solar
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JinkoSolar and SMA is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding Co and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and SMA Solar go up and down completely randomly.
Pair Corralation between JinkoSolar Holding and SMA Solar
Assuming the 90 days trading horizon JinkoSolar Holding Co is expected to under-perform the SMA Solar. But the stock apears to be less risky and, when comparing its historical volatility, JinkoSolar Holding Co is 1.38 times less risky than SMA Solar. The stock trades about -0.17 of its potential returns per unit of risk. The SMA Solar Technology is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,603 in SMA Solar Technology on September 1, 2024 and sell it today you would lose (237.00) from holding SMA Solar Technology or give up 14.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
JinkoSolar Holding Co vs. SMA Solar Technology
Performance |
| Timeline |
| JinkoSolar Holding |
| SMA Solar Technology |
JinkoSolar Holding and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JinkoSolar Holding and SMA Solar
The main advantage of trading using opposite JinkoSolar Holding and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| JinkoSolar Holding vs. BLUESCOPE STEEL | JinkoSolar Holding vs. Algonquin Power Utilities | JinkoSolar Holding vs. Nippon Steel | JinkoSolar Holding vs. ALGOMA STEEL GROUP |
| SMA Solar vs. PSI Software AG | SMA Solar vs. Alfa Financial Software | SMA Solar vs. Major Drilling Group | SMA Solar vs. ATOSS SOFTWARE |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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