Correlation Between JinkoSolar Holding and COFCO Joycome

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

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

Diversification Opportunities for JinkoSolar Holding and COFCO Joycome

0.49

Correlation Coefficient

JinkoSolar Holding  COFCO Joycome

Very weak diversification

The 3 months correlation between JinkoSolar and COFCO is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding Co and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods 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 Co are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and COFCO Joycome go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and COFCO Joycome

Assuming the 90 days trading horizon JinkoSolar Holding Co is expected to generate 1.45 times more return on investment than COFCO Joycome. However, JinkoSolar Holding is 1.45 times more volatile than COFCO Joycome Foods. It trades about 0.07 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.01 per unit of risk. If you would invest  1,804  in JinkoSolar Holding Co on October 4, 2024 and sell it today you would earn a total of  561.00  from holding JinkoSolar Holding Co or generate 31.1% return on investment over 90 days.

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

JinkoSolar Holding Co  vs.  COFCO Joycome Foods

JinkoSolar Holding

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, JinkoSolar Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COFCO Joycome Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COFCO Joycome Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with JinkoSolar Holding and COFCO Joycome

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

The idea behind JinkoSolar Holding Co and COFCO Joycome Foods 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.