Correlation Between JinkoSolar Holding and Destinations Municipal

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

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

Diversification Opportunities for JinkoSolar Holding and Destinations Municipal

0.17

Correlation Coefficient

JinkoSolar Holding  Destinations Municipal

Average diversification

The 3 months correlation between JinkoSolar and Destinations is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Destinations Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destinations Municipal 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 Destinations Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destinations Municipal has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Destinations Municipal go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Destinations Municipal

Considering the 90-day investment horizon JinkoSolar Holding is expected to generate 19.51 times more return on investment than Destinations Municipal. However, JinkoSolar Holding is 19.51 times more volatile than Destinations Municipal Fixed. It trades about 0.07 of its potential returns per unit of risk. Destinations Municipal Fixed is currently generating about -0.4 per unit of risk. If you would invest  2,505  in JinkoSolar Holding on October 5, 2024 and sell it today you would earn a total of  96.00  from holding JinkoSolar Holding or generate 3.83% return on investment over 90 days.

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

JinkoSolar Holding  vs.  Destinations Municipal Fixed

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.

Destinations Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Destinations Municipal Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Destinations Municipal is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JinkoSolar Holding and Destinations Municipal

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

The idea behind JinkoSolar Holding and Destinations Municipal Fixed 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .