Correlation Between Yunji and IPower
Can any of the company-specific risk be diversified away by investing in both Yunji and IPower 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 Yunji and IPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yunji Inc and iPower Inc, you can compare the effects of market volatilities on Yunji and IPower 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 Yunji with a short position of IPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunji and IPower.
Diversification Opportunities for Yunji and IPower
Good diversification
The 3 months correlation between Yunji and IPower is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and Yunji 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 Yunji Inc are associated (or correlated) with IPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iPower Inc has no effect on the direction of Yunji i.e., Yunji and IPower go up and down completely randomly.
Pair Corralation between Yunji and IPower
Allowing for the 90-day total investment horizon Yunji is expected to generate 5.27 times less return on investment than IPower. But when comparing it to its historical volatility, Yunji Inc is 1.44 times less risky than IPower. It trades about 0.01 of its potential returns per unit of risk. iPower Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 62.00 in iPower Inc on November 9, 2024 and sell it today you would earn a total of 9.00 from holding iPower Inc or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunji Inc vs. iPower Inc
Performance |
| Timeline |
| Yunji Inc |
| iPower Inc |
Yunji and IPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunji and IPower
The main advantage of trading using opposite Yunji and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunji position performs unexpectedly, IPower 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 IPower will offset losses from the drop in IPower's long position.The idea behind Yunji Inc and iPower Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IPower vs. Hour Loop | IPower vs. Qurate Retail Series | IPower vs. MOGU Inc | IPower vs. Meiwu Technology Co |
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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