Correlation Between JinkoSolar Holding and TATA SUMER

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

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

Diversification Opportunities for JinkoSolar Holding and TATA SUMER

-0.32

Correlation Coefficient

JinkoSolar Holding  TATA SUMER

Very good diversification

The 3 months correlation between JinkoSolar and TATA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and TATA SUMER PRODUCTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TATA SUMER PRODUCTS 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 TATA SUMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TATA SUMER PRODUCTS has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and TATA SUMER go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and TATA SUMER

Considering the 90-day investment horizon JinkoSolar Holding is expected to under-perform the TATA SUMER. In addition to that, JinkoSolar Holding is 3.89 times more volatile than TATA SUMER PRODUCTS. It trades about -0.13 of its total potential returns per unit of risk. TATA SUMER PRODUCTS is currently generating about 0.23 per unit of volatility. If you would invest  90,710  in TATA SUMER PRODUCTS on October 20, 2024 and sell it today you would earn a total of  4,735  from holding TATA SUMER PRODUCTS or generate 5.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

JinkoSolar Holding  vs.  TATA SUMER PRODUCTS

JinkoSolar Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JinkoSolar Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, JinkoSolar Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

TATA SUMER PRODUCTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TATA SUMER PRODUCTS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, TATA SUMER is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JinkoSolar Holding and TATA SUMER

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

The idea behind JinkoSolar Holding and TATA SUMER PRODUCTS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.