Correlation Between Siemens Healthineers and JinkoSolar Holding

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

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

Diversification Opportunities for Siemens Healthineers and JinkoSolar Holding

0.18

Correlation Coefficient

Siemens Healthineers  JinkoSolar Holding

Average diversification

The 3 months correlation between Siemens and JinkoSolar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Siemens Healthineers AG and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Siemens Healthineers 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 Siemens Healthineers AG 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 Siemens Healthineers i.e., Siemens Healthineers and JinkoSolar Holding go up and down completely randomly.

Pair Corralation between Siemens Healthineers and JinkoSolar Holding

Assuming the 90 days horizon Siemens Healthineers AG is expected to generate 0.34 times more return on investment than JinkoSolar Holding. However, Siemens Healthineers AG is 2.92 times less risky than JinkoSolar Holding. It trades about -0.07 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about -0.13 per unit of risk. If you would invest  5,210  in Siemens Healthineers AG on October 10, 2024 and sell it today you would lose (78.00) from holding Siemens Healthineers AG or give up 1.5% of portfolio value over 90 days.

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

Siemens Healthineers AG  vs.  JinkoSolar Holding Co

Siemens Healthineers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siemens Healthineers AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Siemens Healthineers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

JinkoSolar Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JinkoSolar Holding Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, JinkoSolar Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siemens Healthineers and JinkoSolar Holding

The main advantage of trading using opposite Siemens Healthineers and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siemens Healthineers 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 Siemens Healthineers AG 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.