Correlation Between JinkoSolar Holding and Varta AG
Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and Varta AG 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 Varta AG 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 Varta AG, you can compare the effects of market volatilities on JinkoSolar Holding and Varta AG 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 Varta AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and Varta AG.
Diversification Opportunities for JinkoSolar Holding and Varta AG
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JinkoSolar and Varta is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding Co and Varta AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varta AG 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 Varta AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varta AG has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Varta AG go up and down completely randomly.
Pair Corralation between JinkoSolar Holding and Varta AG
Assuming the 90 days trading horizon JinkoSolar Holding Co is expected to generate 0.47 times more return on investment than Varta AG. However, JinkoSolar Holding Co is 2.13 times less risky than Varta AG. It trades about -0.01 of its potential returns per unit of risk. Varta AG is currently generating about -0.01 per unit of risk. If you would invest 4,202 in JinkoSolar Holding Co on September 5, 2024 and sell it today you would lose (1,827) from holding JinkoSolar Holding Co or give up 43.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
JinkoSolar Holding Co vs. Varta AG
Performance |
| Timeline |
| JinkoSolar Holding |
| Varta AG |
JinkoSolar Holding and Varta AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JinkoSolar Holding and Varta AG
The main advantage of trading using opposite JinkoSolar Holding and Varta AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, Varta AG 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 Varta AG will offset losses from the drop in Varta AG's long position.| JinkoSolar Holding vs. Superior Plus Corp | JinkoSolar Holding vs. NMI Holdings | JinkoSolar Holding vs. Origin Agritech | JinkoSolar Holding vs. SIVERS SEMICONDUCTORS AB |
| Varta AG vs. MYFAIR GOLD P | Varta AG vs. FORWARD AIR P | Varta AG vs. Wizz Air Holdings | Varta AG vs. BRIT AMER TOBACCO |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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