Correlation Between SECURITAS and JinkoSolar Holding

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

By analyzing existing cross correlation between SECURITAS B and JinkoSolar Holding Co, you can compare the effects of market volatilities on SECURITAS and JinkoSolar Holding 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 SECURITAS with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURITAS and JinkoSolar Holding.

Diversification Opportunities for SECURITAS and JinkoSolar Holding

0.38

Correlation Coefficient

SECURITAS  JinkoSolar Holding

Weak diversification

The 3 months correlation between SECURITAS and JinkoSolar is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SECURITAS B and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and SECURITAS 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 SECURITAS B are associated (or correlated) with JinkoSolar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JinkoSolar Holding has no effect on the direction of SECURITAS i.e., SECURITAS and JinkoSolar Holding go up and down completely randomly.

Pair Corralation between SECURITAS and JinkoSolar Holding

Assuming the 90 days trading horizon SECURITAS B is expected to generate 0.55 times more return on investment than JinkoSolar Holding. However, SECURITAS B is 1.82 times less risky than JinkoSolar Holding. It trades about 0.13 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about 0.04 per unit of risk. If you would invest  963.00  in SECURITAS B on October 22, 2024 and sell it today you would earn a total of  219.00  from holding SECURITAS B or generate 22.74% return on investment over 90 days.

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

SECURITAS B   vs.  JinkoSolar Holding Co

SECURITAS B

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SECURITAS B are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SECURITAS unveiled solid returns over the last few months and may actually be approaching a breakup point.

JinkoSolar Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JinkoSolar Holding Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JinkoSolar Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SECURITAS and JinkoSolar Holding

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

The idea behind SECURITAS B and JinkoSolar Holding Co 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.