Correlation Between JinkoSolar Holding and Lendingtree

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Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and Lendingtree 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 Lendingtree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JinkoSolar Holding and Lendingtree, you can compare the effects of market volatilities on JinkoSolar Holding and Lendingtree 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 Lendingtree. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and Lendingtree.

Diversification Opportunities for JinkoSolar Holding and Lendingtree

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between JinkoSolar and Lendingtree is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and Lendingtree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendingtree 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 Lendingtree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendingtree has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Lendingtree go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Lendingtree

Considering the 90-day investment horizon JinkoSolar Holding is expected to generate 1.3 times more return on investment than Lendingtree. However, JinkoSolar Holding is 1.3 times more volatile than Lendingtree. It trades about -0.03 of its potential returns per unit of risk. Lendingtree is currently generating about -0.1 per unit of risk. If you would invest  3,277  in JinkoSolar Holding on October 5, 2024 and sell it today you would lose (676.00) from holding JinkoSolar Holding or give up 20.63% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.39%
ValuesDaily Returns

JinkoSolar Holding  vs.  Lendingtree

 Performance 
       Timeline  
JinkoSolar Holding 

Risk-Adjusted Performance

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Strong
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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.
Lendingtree 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Lendingtree has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

JinkoSolar Holding and Lendingtree Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JinkoSolar Holding and Lendingtree

The main advantage of trading using opposite JinkoSolar Holding and Lendingtree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, Lendingtree 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 Lendingtree will offset losses from the drop in Lendingtree's long position.
The idea behind JinkoSolar Holding and Lendingtree 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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