Correlation Between JinkoSolar Holding and Royal Caribbean

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

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

Diversification Opportunities for JinkoSolar Holding and Royal Caribbean

0.06

Correlation Coefficient

JinkoSolar Holding  Royal Caribbean

Significant diversification

The 3 months correlation between JinkoSolar and Royal is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Royal Caribbean Cruises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Caribbean Cruises 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 Royal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Caribbean Cruises has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Royal Caribbean go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Royal Caribbean

Considering the 90-day investment horizon JinkoSolar Holding is expected to under-perform the Royal Caribbean. In addition to that, JinkoSolar Holding is 2.8 times more volatile than Royal Caribbean Cruises. It trades about -0.03 of its total potential returns per unit of risk. Royal Caribbean Cruises is currently generating about 0.3 per unit of volatility. If you would invest  49,092  in Royal Caribbean Cruises on October 5, 2024 and sell it today you would earn a total of  21,348  from holding Royal Caribbean Cruises or generate 43.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

JinkoSolar Holding  vs.  Royal Caribbean Cruises

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.

Royal Caribbean Cruises

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Royal Caribbean Cruises are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Royal Caribbean sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JinkoSolar Holding and Royal Caribbean

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

The idea behind JinkoSolar Holding and Royal Caribbean Cruises 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.