Correlation Between SWISS WATER and JinkoSolar Holding

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

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

Diversification Opportunities for SWISS WATER and JinkoSolar Holding

-0.31

Correlation Coefficient

SWISS WATER  JinkoSolar Holding

Very good diversification

The 3 months correlation between SWISS and JinkoSolar is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and JinkoSolar Holding go up and down completely randomly.

Pair Corralation between SWISS WATER and JinkoSolar Holding

Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the JinkoSolar Holding. In addition to that, SWISS WATER is 1.05 times more volatile than JinkoSolar Holding Co. It trades about -0.06 of its total potential returns per unit of risk. JinkoSolar Holding Co is currently generating about 0.03 per unit of volatility. If you would invest  2,715  in JinkoSolar Holding Co on October 9, 2024 and sell it today you would earn a total of  25.00  from holding JinkoSolar Holding Co or generate 0.92% return on investment over 90 days.

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

SWISS WATER DECAFFCOFFEE  vs.  JinkoSolar Holding Co

SWISS WATER DECAFFCOFFEE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SWISS WATER DECAFFCOFFEE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SWISS WATER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JinkoSolar Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JinkoSolar Holding Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JinkoSolar Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SWISS WATER and JinkoSolar Holding

The main advantage of trading using opposite SWISS WATER and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.