Correlation Between IPower and Nuvve Holding

Can any of the company-specific risk be diversified away by investing in both IPower and Nuvve Holding 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 Nuvve Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iPower Inc and Nuvve Holding Corp, you can compare the effects of market volatilities on IPower and Nuvve Holding 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 Nuvve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPower and Nuvve Holding.

Diversification Opportunities for IPower and Nuvve Holding

0.66

Correlation Coefficient

IPower  Nuvve Holding

Poor diversification

The 3 months correlation between IPower and Nuvve is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp 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 Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of IPower i.e., IPower and Nuvve Holding go up and down completely randomly.

Pair Corralation between IPower and Nuvve Holding

Considering the 90-day investment horizon iPower Inc is expected to generate 2.09 times more return on investment than Nuvve Holding. However, IPower is 2.09 times more volatile than Nuvve Holding Corp. It trades about -0.06 of its potential returns per unit of risk. Nuvve Holding Corp is currently generating about -0.17 per unit of risk. If you would invest  164.00  in iPower Inc on September 26, 2024 and sell it today you would lose (81.00) from holding iPower Inc or give up 49.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

iPower Inc  vs.  Nuvve Holding Corp

iPower Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iPower Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with IPower and Nuvve Holding

The main advantage of trading using opposite IPower and Nuvve Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPower position performs unexpectedly, Nuvve Holding 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 Nuvve Holding will offset losses from the drop in Nuvve Holding's long position.

The idea behind iPower Inc and Nuvve Holding Corp 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..