Correlation Between IPower and Hour Loop
Can any of the company-specific risk be diversified away by investing in both IPower and Hour Loop 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 Hour Loop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPower Inc and Hour Loop, you can compare the effects of market volatilities on IPower and Hour Loop 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 Hour Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPower and Hour Loop.
Diversification Opportunities for IPower and Hour Loop
Good diversification
The 3 months correlation between IPower and Hour is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and Hour Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hour Loop 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 Hour Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hour Loop has no effect on the direction of IPower i.e., IPower and Hour Loop go up and down completely randomly.
Pair Corralation between IPower and Hour Loop
Considering the 90-day investment horizon iPower Inc is expected to under-perform the Hour Loop. In addition to that, IPower is 1.37 times more volatile than Hour Loop. It trades about -0.29 of its total potential returns per unit of risk. Hour Loop is currently generating about 0.04 per unit of volatility. If you would invest 145.00 in Hour Loop on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Hour Loop or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPower Inc vs. Hour Loop
Performance |
| Timeline |
| iPower Inc |
| Hour Loop |
IPower and Hour Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPower and Hour Loop
The main advantage of trading using opposite IPower and Hour Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPower position performs unexpectedly, Hour Loop 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 Hour Loop will offset losses from the drop in Hour Loop's long position.| IPower vs. Hour Loop | IPower vs. Qurate Retail Series | IPower vs. MOGU Inc | IPower vs. Meiwu Technology Co |
| Hour Loop vs. Qurate Retail Series | Hour Loop vs. iPower Inc | Hour Loop vs. MOGU Inc | Hour Loop vs. Qurate Retail |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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