Correlation Between JinkoSolar Holding and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and NorAm Drilling 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 NorAm Drilling 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 NorAm Drilling AS, you can compare the effects of market volatilities on JinkoSolar Holding and NorAm Drilling 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 NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and NorAm Drilling.
Diversification Opportunities for JinkoSolar Holding and NorAm Drilling
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JinkoSolar and NorAm is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding Co and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS 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 NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and NorAm Drilling go up and down completely randomly.
Pair Corralation between JinkoSolar Holding and NorAm Drilling
Assuming the 90 days trading horizon JinkoSolar Holding Co is expected to under-perform the NorAm Drilling. But the stock apears to be less risky and, when comparing its historical volatility, JinkoSolar Holding Co is 2.74 times less risky than NorAm Drilling. The stock trades about -0.01 of its potential returns per unit of risk. The NorAm Drilling AS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 99.00 in NorAm Drilling AS on September 2, 2024 and sell it today you would earn a total of 191.00 from holding NorAm Drilling AS or generate 192.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JinkoSolar Holding Co vs. NorAm Drilling AS
Performance |
| Timeline |
| JinkoSolar Holding |
| NorAm Drilling AS |
JinkoSolar Holding and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JinkoSolar Holding and NorAm Drilling
The main advantage of trading using opposite JinkoSolar Holding and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| JinkoSolar Holding vs. Ming Le Sports | JinkoSolar Holding vs. Playa Hotels Resorts | JinkoSolar Holding vs. Perseus Mining Limited | JinkoSolar Holding vs. PLAYTECH |
| NorAm Drilling vs. SIEM OFFSHORE NEW | NorAm Drilling vs. UMC Electronics Co | NorAm Drilling vs. LPKF Laser Electronics | NorAm Drilling vs. CECO ENVIRONMENTAL |
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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