Correlation Between JinkoSolar Holding and Midcap Growth

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

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

Diversification Opportunities for JinkoSolar Holding and Midcap Growth

0.12

Correlation Coefficient

JinkoSolar Holding  Midcap Growth

Average diversification

The 3 months correlation between JinkoSolar and Midcap is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Midcap Growth go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Midcap Growth

Considering the 90-day investment horizon JinkoSolar Holding is expected to under-perform the Midcap Growth. In addition to that, JinkoSolar Holding is 3.69 times more volatile than Midcap Growth Fund. It trades about -0.01 of its total potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.07 per unit of volatility. If you would invest  850.00  in Midcap Growth Fund on October 4, 2024 and sell it today you would earn a total of  352.00  from holding Midcap Growth Fund or generate 41.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.96%
Values	Daily Returns

JinkoSolar Holding  vs.  Midcap Growth Fund

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.

Midcap Growth

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Midcap Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, Midcap Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JinkoSolar Holding and Midcap Growth

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

The idea behind JinkoSolar Holding and Midcap Growth Fund 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.