Correlation Between Hour Loop and IPower
Can any of the company-specific risk be diversified away by investing in both Hour Loop 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 Hour Loop and IPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hour Loop and iPower Inc, you can compare the effects of market volatilities on Hour Loop 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 Hour Loop with a short position of IPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hour Loop and IPower.
Diversification Opportunities for Hour Loop and IPower
Very weak diversification
The 3 months correlation between Hour and IPower is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hour Loop and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and Hour Loop 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 Hour Loop 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 Hour Loop i.e., Hour Loop and IPower go up and down completely randomly.
Pair Corralation between Hour Loop and IPower
Given the investment horizon of 90 days Hour Loop is expected to under-perform the IPower. In addition to that, Hour Loop is 1.17 times more volatile than iPower Inc. It trades about -0.06 of its total potential returns per unit of risk. iPower Inc is currently generating about -0.06 per unit of volatility. If you would invest 81.00 in iPower Inc on December 27, 2024 and sell it today you would lose (19.00) from holding iPower Inc or give up 23.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hour Loop vs. iPower Inc
Performance |
Timeline |
Hour Loop |
iPower Inc |
Hour Loop and IPower Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hour Loop and IPower
The main advantage of trading using opposite Hour Loop and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hour Loop 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.Hour Loop vs. PDD Holdings | Hour Loop vs. Alibaba Group Holding | Hour Loop vs. Global E Online | Hour Loop vs. Sea |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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