Correlation Between Dada Nexus and IPower
Can any of the company-specific risk be diversified away by investing in both Dada Nexus 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 Dada Nexus and IPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dada Nexus and iPower Inc, you can compare the effects of market volatilities on Dada Nexus 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 Dada Nexus with a short position of IPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dada Nexus and IPower.
Diversification Opportunities for Dada Nexus and IPower
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dada and IPower is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dada Nexus and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and Dada Nexus 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 Dada Nexus 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 Dada Nexus i.e., Dada Nexus and IPower go up and down completely randomly.
Pair Corralation between Dada Nexus and IPower
Given the investment horizon of 90 days Dada Nexus is expected to generate 1.61 times less return on investment than IPower. But when comparing it to its historical volatility, Dada Nexus is 1.25 times less risky than IPower. It trades about 0.03 of its potential returns per unit of risk. iPower Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 83.00 in iPower Inc on October 24, 2024 and sell it today you would earn a total of 1.00 from holding iPower Inc or generate 1.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dada Nexus vs. iPower Inc
Performance |
Timeline |
Dada Nexus |
iPower Inc |
Dada Nexus and IPower Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dada Nexus and IPower
The main advantage of trading using opposite Dada Nexus and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dada Nexus 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.Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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