Correlation Between Benchmark Electronics and JinkoSolar Holding
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics 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 Benchmark Electronics and JinkoSolar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and JinkoSolar Holding, you can compare the effects of market volatilities on Benchmark Electronics 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 Benchmark Electronics with a short position of JinkoSolar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and JinkoSolar Holding.
Diversification Opportunities for Benchmark Electronics and JinkoSolar Holding
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Benchmark and JinkoSolar is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and JinkoSolar Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JinkoSolar Holding and Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics i.e., Benchmark Electronics and JinkoSolar Holding go up and down completely randomly.
Pair Corralation between Benchmark Electronics and JinkoSolar Holding
Considering the 90-day investment horizon Benchmark Electronics is expected to generate 0.46 times more return on investment than JinkoSolar Holding. However, Benchmark Electronics is 2.16 times less risky than JinkoSolar Holding. It trades about 0.03 of its potential returns per unit of risk. JinkoSolar Holding is currently generating about -0.03 per unit of risk. If you would invest 2,723 in Benchmark Electronics on January 26, 2024 and sell it today you would earn a total of 336.00 from holding Benchmark Electronics or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Electronics vs. JinkoSolar Holding
Performance |
| Timeline |
| Benchmark Electronics |
| JinkoSolar Holding |
Benchmark Electronics and JinkoSolar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and JinkoSolar Holding
The main advantage of trading using opposite Benchmark Electronics and JinkoSolar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics 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.| Benchmark Electronics vs. Sanmina | Benchmark Electronics vs. Methode Electronics | Benchmark Electronics vs. OSI Systems | Benchmark Electronics vs. Celestica |
| JinkoSolar Holding vs. Sunnova Energy International | JinkoSolar Holding vs. Nextracker Class A | JinkoSolar Holding vs. Sunrun Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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