Correlation Between JinkoSolar Holding and Xinyi Solar

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Can any of the company-specific risk be diversified away by investing in both JinkoSolar Holding and Xinyi Solar 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 Xinyi Solar 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 Xinyi Solar Holdings, you can compare the effects of market volatilities on JinkoSolar Holding and Xinyi Solar 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 Xinyi Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of JinkoSolar Holding and Xinyi Solar.

Diversification Opportunities for JinkoSolar Holding and Xinyi Solar

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between JinkoSolar and Xinyi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding JinkoSolar Holding Co and Xinyi Solar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Solar Holdings 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 Xinyi Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Solar Holdings has no effect on the direction of JinkoSolar Holding i.e., JinkoSolar Holding and Xinyi Solar go up and down completely randomly.

Pair Corralation between JinkoSolar Holding and Xinyi Solar

Assuming the 90 days trading horizon JinkoSolar Holding Co is expected to generate 0.96 times more return on investment than Xinyi Solar. However, JinkoSolar Holding Co is 1.04 times less risky than Xinyi Solar. It trades about 0.06 of its potential returns per unit of risk. Xinyi Solar Holdings is currently generating about 0.01 per unit of risk. If you would invest  2,035  in JinkoSolar Holding Co on September 2, 2025 and sell it today you would earn a total of  230.00  from holding JinkoSolar Holding Co or generate 11.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

JinkoSolar Holding Co  vs.  Xinyi Solar Holdings

 Performance 
       Timeline  
JinkoSolar Holding 

Risk-Adjusted Performance

Soft

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in JinkoSolar Holding Co are ranked lower than 4 (%) 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.
Xinyi Solar Holdings 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Xinyi Solar Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Xinyi Solar is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

JinkoSolar Holding and Xinyi Solar Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JinkoSolar Holding and Xinyi Solar

The main advantage of trading using opposite JinkoSolar Holding and Xinyi Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JinkoSolar Holding position performs unexpectedly, Xinyi Solar 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 Xinyi Solar will offset losses from the drop in Xinyi Solar's long position.
The idea behind JinkoSolar Holding Co and Xinyi Solar Holdings 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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