Correlation Between JinkoSolar Holding and BAG Films

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

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

Diversification Opportunities for JinkoSolar Holding and BAG Films

0.34

Correlation Coefficient

JinkoSolar Holding  BAG Films

Weak diversification

The 3 months correlation between JinkoSolar and BAG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and BAG Films and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAG Films 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 BAG Films. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAG Films has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and BAG Films go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and BAG Films

Considering the 90-day investment horizon JinkoSolar Holding is expected to generate 2.62 times less return on investment than BAG Films. In addition to that, JinkoSolar Holding is 1.15 times more volatile than BAG Films and. It trades about 0.01 of its total potential returns per unit of risk. BAG Films and is currently generating about 0.04 per unit of volatility. If you would invest  840.00  in BAG Films and on October 5, 2024 and sell it today you would earn a total of  171.00  from holding BAG Films and or generate 20.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.51%
Values	Daily Returns

JinkoSolar Holding  vs.  BAG Films and

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 latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

BAG Films

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAG Films and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with JinkoSolar Holding and BAG Films

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

The idea behind JinkoSolar Holding and BAG Films and 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.