Correlation Between JinkoSolar Holding and RENTOKIL INITIAL

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

By analyzing existing cross correlation between JinkoSolar Holding and RENTOKIL INITIAL ADR5, you can compare the effects of market volatilities on JinkoSolar Holding and RENTOKIL INITIAL 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 RENTOKIL INITIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and RENTOKIL INITIAL.

Diversification Opportunities for JinkoSolar Holding and RENTOKIL INITIAL

0.2

Correlation Coefficient

JinkoSolar Holding  RENTOKIL INITIAL

Modest diversification

The 3 months correlation between JinkoSolar and RENTOKIL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and RENTOKIL INITIAL ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENTOKIL INITIAL ADR5 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 RENTOKIL INITIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENTOKIL INITIAL ADR5 has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and RENTOKIL INITIAL go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and RENTOKIL INITIAL

Considering the 90-day investment horizon JinkoSolar Holding is expected to generate 1.39 times more return on investment than RENTOKIL INITIAL. However, JinkoSolar Holding is 1.39 times more volatile than RENTOKIL INITIAL ADR5. It trades about 0.02 of its potential returns per unit of risk. RENTOKIL INITIAL ADR5 is currently generating about -0.01 per unit of risk. If you would invest  2,584  in JinkoSolar Holding on October 4, 2024 and sell it today you would earn a total of  17.00  from holding JinkoSolar Holding or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.1%
Values	Daily Returns

JinkoSolar Holding  vs.  RENTOKIL INITIAL ADR5

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.

RENTOKIL INITIAL ADR5

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RENTOKIL INITIAL ADR5 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, RENTOKIL INITIAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with JinkoSolar Holding and RENTOKIL INITIAL

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

The idea behind JinkoSolar Holding and RENTOKIL INITIAL ADR5 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.