Correlation Between JinkoSolar Holding and Celltrion Pharm

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

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

Diversification Opportunities for JinkoSolar Holding and Celltrion Pharm

0.07

Correlation Coefficient

JinkoSolar Holding  Celltrion Pharm

Significant diversification

The 3 months correlation between JinkoSolar and Celltrion is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Celltrion Pharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celltrion Pharm 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 Celltrion Pharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celltrion Pharm has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Celltrion Pharm go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Celltrion Pharm

Considering the 90-day investment horizon JinkoSolar Holding is expected to under-perform the Celltrion Pharm. In addition to that, JinkoSolar Holding is 1.23 times more volatile than Celltrion Pharm. It trades about -0.01 of its total potential returns per unit of risk. Celltrion Pharm is currently generating about 0.01 per unit of volatility. If you would invest  6,113,379  in Celltrion Pharm on October 4, 2024 and sell it today you would lose (443,379) from holding Celltrion Pharm or give up 7.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.98%
Values	Daily Returns

JinkoSolar Holding  vs.  Celltrion Pharm

JinkoSolar Holding

Risk-Adjusted Performance

0 of 100

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 comparatively stable forward-looking signals, JinkoSolar Holding is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Celltrion Pharm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celltrion Pharm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JinkoSolar Holding and Celltrion Pharm

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

The idea behind JinkoSolar Holding and Celltrion Pharm 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.