Correlation Between IPower and Dow Jones
Can any of the company-specific risk be diversified away by investing in both IPower and Dow Jones 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 IPower and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPower Inc and Dow Jones Industrial, you can compare the effects of market volatilities on IPower and Dow Jones 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 IPower with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPower and Dow Jones.
Diversification Opportunities for IPower and Dow Jones
Good diversification
The 3 months correlation between IPower and Dow is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and IPower 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 iPower Inc are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of IPower i.e., IPower and Dow Jones go up and down completely randomly.
Pair Corralation between IPower and Dow Jones
Considering the 90-day investment horizon iPower Inc is expected to generate 13.81 times more return on investment than Dow Jones. However, IPower is 13.81 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.07 per unit of risk. If you would invest 54.00 in iPower Inc on August 24, 2024 and sell it today you would earn a total of 9.00 from holding iPower Inc or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
iPower Inc vs. Dow Jones Industrial
Performance |
| Timeline |
IPower and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
iPower Inc
Pair trading matchups for IPower
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with IPower and Dow Jones
The main advantage of trading using opposite IPower and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPower position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| IPower vs. Hour Loop | IPower vs. Qurate Retail Series | IPower vs. MOGU Inc | IPower vs. Meiwu Technology Co |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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