Correlation Between IPower and Liquidity Services
Can any of the company-specific risk be diversified away by investing in both IPower and Liquidity Services 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 Liquidity Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPower Inc and Liquidity Services, you can compare the effects of market volatilities on IPower and Liquidity Services 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 Liquidity Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPower and Liquidity Services.
Diversification Opportunities for IPower and Liquidity Services
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPower and Liquidity is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and Liquidity Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liquidity Services 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 Liquidity Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liquidity Services has no effect on the direction of IPower i.e., IPower and Liquidity Services go up and down completely randomly.
Pair Corralation between IPower and Liquidity Services
Considering the 90-day investment horizon iPower Inc is expected to under-perform the Liquidity Services. In addition to that, IPower is 4.86 times more volatile than Liquidity Services. It trades about -0.05 of its total potential returns per unit of risk. Liquidity Services is currently generating about 0.13 per unit of volatility. If you would invest 1,915 in Liquidity Services on August 24, 2024 and sell it today you would earn a total of 603.00 from holding Liquidity Services or generate 31.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPower Inc vs. Liquidity Services
Performance |
| Timeline |
| iPower Inc |
| Liquidity Services |
IPower and Liquidity Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPower and Liquidity Services
The main advantage of trading using opposite IPower and Liquidity Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPower position performs unexpectedly, Liquidity Services 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 Liquidity Services will offset losses from the drop in Liquidity Services' long position.| IPower vs. Hour Loop | IPower vs. Qurate Retail Series | IPower vs. MOGU Inc | IPower vs. Meiwu Technology Co |
| Liquidity Services vs. Qurate Retail Series | Liquidity Services vs. Qurate Retail | Liquidity Services vs. Dada Nexus | Liquidity Services vs. Natural Health Trend |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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