Correlation Between Jeffs Brands and IPower

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

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

Diversification Opportunities for Jeffs Brands and IPower

-0.86

Correlation Coefficient

Jeffs Brands  IPower

Pay attention - limited upside

The 3 months correlation between Jeffs and IPower is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jeffs Brands and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and Jeffs Brands 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 Jeffs Brands 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 Jeffs Brands i.e., Jeffs Brands and IPower go up and down completely randomly.

Pair Corralation between Jeffs Brands and IPower

Given the investment horizon of 90 days Jeffs Brands is expected to generate 12.11 times more return on investment than IPower. However, Jeffs Brands is 12.11 times more volatile than iPower Inc. It trades about 0.12 of its potential returns per unit of risk. iPower Inc is currently generating about -0.02 per unit of risk. If you would invest  28.00  in Jeffs Brands on September 20, 2024 and sell it today you would earn a total of  201.00  from holding Jeffs Brands or generate 717.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Jeffs Brands  vs.  iPower Inc

Jeffs Brands

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jeffs Brands are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Jeffs Brands reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Jeffs Brands and IPower

The main advantage of trading using opposite Jeffs Brands and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeffs Brands 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 Jeffs Brands 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.