Correlation Between IPower and Yunji

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

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

Diversification Opportunities for IPower and Yunji

-0.67

Correlation Coefficient

IPower  Yunji

Excellent diversification

The 3 months correlation between IPower and Yunji is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and Yunji Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunji Inc 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 Yunji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunji Inc has no effect on the direction of IPower i.e., IPower and Yunji go up and down completely randomly.

Pair Corralation between IPower and Yunji

Considering the 90-day investment horizon iPower Inc is expected to under-perform the Yunji. In addition to that, IPower is 1.2 times more volatile than Yunji Inc. It trades about -0.08 of its total potential returns per unit of risk. Yunji Inc is currently generating about 0.06 per unit of volatility. If you would invest  169.00  in Yunji Inc on December 27, 2024 and sell it today you would earn a total of  17.00  from holding Yunji Inc or generate 10.06% return on investment over 90 days.

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

iPower Inc  vs.  Yunji Inc

iPower Inc

Risk-Adjusted Performance

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 April 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Yunji Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yunji Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Yunji revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IPower and Yunji

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

The idea behind iPower Inc and Yunji 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.