Correlation Between JinkoSolar Holding and Canadian Solar

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

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

Diversification Opportunities for JinkoSolar Holding and Canadian Solar

0.8

Correlation Coefficient

JinkoSolar Holding  Canadian Solar

Very poor diversification

The 3 months correlation between JinkoSolar and Canadian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar 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 Canadian Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Solar has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Canadian Solar go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Canadian Solar

Considering the 90-day investment horizon JinkoSolar Holding is expected to under-perform the Canadian Solar. But the stock apears to be less risky and, when comparing its historical volatility, JinkoSolar Holding is 1.0 times less risky than Canadian Solar. The stock trades about -0.09 of its potential returns per unit of risk. The Canadian Solar is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  1,123  in Canadian Solar on December 30, 2024 and sell it today you would lose (200.00) from holding Canadian Solar or give up 17.81% of portfolio value over 90 days.

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

JinkoSolar Holding  vs.  Canadian Solar

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.

Canadian Solar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian Solar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with JinkoSolar Holding and Canadian Solar

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

The idea behind JinkoSolar Holding and Canadian Solar 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.