Correlation Between JinkoSolar Holding and Anhui Jinhe

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

By analyzing existing cross correlation between JinkoSolar Holding and Anhui Jinhe Industrial, you can compare the effects of market volatilities on JinkoSolar Holding and Anhui Jinhe 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 Anhui Jinhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and Anhui Jinhe.

Diversification Opportunities for JinkoSolar Holding and Anhui Jinhe

-0.28

Correlation Coefficient

JinkoSolar Holding  Anhui Jinhe

Very good diversification

The 3 months correlation between JinkoSolar and Anhui is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Anhui Jinhe Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jinhe Industrial 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 are associated (or correlated) with Anhui Jinhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jinhe Industrial has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Anhui Jinhe go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Anhui Jinhe

Considering the 90-day investment horizon JinkoSolar Holding is expected to under-perform the Anhui Jinhe. In addition to that, JinkoSolar Holding is 1.78 times more volatile than Anhui Jinhe Industrial. It trades about -0.08 of its total potential returns per unit of risk. Anhui Jinhe Industrial is currently generating about 0.13 per unit of volatility. If you would invest  2,305  in Anhui Jinhe Industrial on December 25, 2024 and sell it today you would earn a total of  334.00  from holding Anhui Jinhe Industrial or generate 14.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

JinkoSolar Holding  vs.  Anhui Jinhe Industrial

JinkoSolar Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days JinkoSolar Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Anhui Jinhe Industrial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anhui Jinhe Industrial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Anhui Jinhe sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JinkoSolar Holding and Anhui Jinhe

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

The idea behind JinkoSolar Holding and Anhui Jinhe Industrial 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.