Correlation Between Samsung SDI and JinkoSolar Holding

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

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

Diversification Opportunities for Samsung SDI and JinkoSolar Holding

0.63

Correlation Coefficient

Samsung SDI  JinkoSolar Holding

Poor diversification

The 3 months correlation between Samsung and JinkoSolar is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI Co and JinkoSolar Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Samsung SDI 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 Samsung SDI Co 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 Samsung SDI i.e., Samsung SDI and JinkoSolar Holding go up and down completely randomly.

Pair Corralation between Samsung SDI and JinkoSolar Holding

Assuming the 90 days trading horizon Samsung SDI Co is expected to generate 0.91 times more return on investment than JinkoSolar Holding. However, Samsung SDI Co is 1.1 times less risky than JinkoSolar Holding. It trades about 0.02 of its potential returns per unit of risk. JinkoSolar Holding Co is currently generating about -0.01 per unit of risk. If you would invest  3,440  in Samsung SDI Co on December 10, 2024 and sell it today you would earn a total of  10.00  from holding Samsung SDI Co or generate 0.29% return on investment over 90 days.

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

Samsung SDI Co  vs.  JinkoSolar Holding Co

Samsung SDI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samsung SDI Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

JinkoSolar Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days JinkoSolar Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Samsung SDI and JinkoSolar Holding

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

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.