Correlation Between JinkoSolar Holding and Xtrackers

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

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

Diversification Opportunities for JinkoSolar Holding and Xtrackers

0.19

Correlation Coefficient

JinkoSolar Holding  Xtrackers

Average diversification

The 3 months correlation between JinkoSolar and Xtrackers is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Xtrackers SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers SP 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 Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers SP has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Xtrackers go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Xtrackers

Considering the 90-day investment horizon JinkoSolar Holding is expected to generate 3.02 times more return on investment than Xtrackers. However, JinkoSolar Holding is 3.02 times more volatile than Xtrackers SP. It trades about 0.0 of its potential returns per unit of risk. Xtrackers SP is currently generating about -0.2 per unit of risk. If you would invest  2,646  in JinkoSolar Holding on October 4, 2024 and sell it today you would lose (45.00) from holding JinkoSolar Holding or give up 1.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

JinkoSolar Holding  vs.  Xtrackers SP

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.

Xtrackers SP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers SP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Xtrackers may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JinkoSolar Holding and Xtrackers

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

The idea behind JinkoSolar Holding and Xtrackers SP 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.