Correlation Between IPower and Oriental Culture
Can any of the company-specific risk be diversified away by investing in both IPower and Oriental Culture 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 Oriental Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPower Inc and Oriental Culture Holding, you can compare the effects of market volatilities on IPower and Oriental Culture 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 Oriental Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPower and Oriental Culture.
Diversification Opportunities for IPower and Oriental Culture
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IPower and Oriental is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and Oriental Culture Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Culture Holding 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 Oriental Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Culture Holding has no effect on the direction of IPower i.e., IPower and Oriental Culture go up and down completely randomly.
Pair Corralation between IPower and Oriental Culture
Considering the 90-day investment horizon iPower Inc is expected to under-perform the Oriental Culture. In addition to that, IPower is 1.55 times more volatile than Oriental Culture Holding. It trades about -0.29 of its total potential returns per unit of risk. Oriental Culture Holding is currently generating about -0.03 per unit of volatility. If you would invest 134.00 in Oriental Culture Holding on August 28, 2024 and sell it today you would lose (12.00) from holding Oriental Culture Holding or give up 8.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPower Inc vs. Oriental Culture Holding
Performance |
| Timeline |
| iPower Inc |
| Oriental Culture Holding |
IPower and Oriental Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPower and Oriental Culture
The main advantage of trading using opposite IPower and Oriental Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPower position performs unexpectedly, Oriental Culture 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 Oriental Culture will offset losses from the drop in Oriental Culture's long position.| IPower vs. Hour Loop | IPower vs. Qurate Retail Series | IPower vs. MOGU Inc | IPower vs. Meiwu Technology Co |
| Oriental Culture vs. Hour Loop | Oriental Culture vs. Jowell Global | Oriental Culture vs. Qurate Retail Series | Oriental Culture vs. Emerge Commerce |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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