Correlation Between Anheuser Busch and JinkoSolar Holding

Can any of the company-specific risk be diversified away by investing in both Anheuser Busch and JinkoSolar Holding 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 Anheuser Busch and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anheuser Busch InBev SANV and JinkoSolar Holding Co, you can compare the effects of market volatilities on Anheuser Busch and JinkoSolar Holding 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 Anheuser Busch with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anheuser Busch and JinkoSolar Holding.

Diversification Opportunities for Anheuser Busch and JinkoSolar Holding

-0.23

Correlation Coefficient

Anheuser Busch  JinkoSolar Holding

Very good diversification

The 3 months correlation between Anheuser and JinkoSolar is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Anheuser Busch InBev SANV and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Anheuser Busch 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 Anheuser Busch InBev SANV are associated (or correlated) with JinkoSolar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JinkoSolar Holding has no effect on the direction of Anheuser Busch i.e., Anheuser Busch and JinkoSolar Holding go up and down completely randomly.

Pair Corralation between Anheuser Busch and JinkoSolar Holding

Assuming the 90 days trading horizon Anheuser Busch InBev SANV is expected to generate 0.45 times more return on investment than JinkoSolar Holding. However, Anheuser Busch InBev SANV is 2.25 times less risky than JinkoSolar Holding. It trades about 0.17 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about -0.08 per unit of risk. If you would invest  4,852  in Anheuser Busch InBev SANV on December 26, 2024 and sell it today you would earn a total of  862.00  from holding Anheuser Busch InBev SANV or generate 17.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Anheuser Busch InBev SANV  vs.  JinkoSolar Holding Co

Anheuser Busch InBev

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anheuser Busch InBev SANV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Anheuser Busch sustained solid returns over the last few months and may actually be approaching a breakup point.

JinkoSolar Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days JinkoSolar Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Anheuser Busch and JinkoSolar Holding

The main advantage of trading using opposite Anheuser Busch and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anheuser Busch position performs unexpectedly, JinkoSolar Holding 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 JinkoSolar Holding will offset losses from the drop in JinkoSolar Holding's long position.

The idea behind Anheuser Busch InBev SANV and JinkoSolar Holding Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.