Correlation Between JinkoSolar Holding and VivoPower International

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

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

Diversification Opportunities for JinkoSolar Holding and VivoPower International

0.66

Correlation Coefficient

JinkoSolar Holding  VivoPower International

Poor diversification

The 3 months correlation between JinkoSolar and VivoPower is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding and VivoPower International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VivoPower International 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 VivoPower International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VivoPower International has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and VivoPower International go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and VivoPower International

Considering the 90-day investment horizon JinkoSolar Holding is expected to generate 1.37 times less return on investment than VivoPower International. But when comparing it to its historical volatility, JinkoSolar Holding is 1.7 times less risky than VivoPower International. It trades about 0.03 of its potential returns per unit of risk. VivoPower International PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  85.00  in VivoPower International PLC on November 20, 2024 and sell it today you would lose (3.00) from holding VivoPower International PLC or give up 3.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

JinkoSolar Holding  vs.  VivoPower International PLC

JinkoSolar Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JinkoSolar Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, JinkoSolar Holding may actually be approaching a critical reversion point that can send shares even higher in March 2025.

VivoPower International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VivoPower International PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VivoPower International may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with JinkoSolar Holding and VivoPower International

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

The idea behind JinkoSolar Holding and VivoPower International PLC 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.