Correlation Between Oriental Culture and IPower

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

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

Diversification Opportunities for Oriental Culture and IPower

-0.41

Correlation Coefficient

Oriental Culture  IPower

Very good diversification

The 3 months correlation between Oriental and IPower is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and Oriental Culture 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 Oriental Culture Holding 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 Oriental Culture i.e., Oriental Culture and IPower go up and down completely randomly.

Pair Corralation between Oriental Culture and IPower

Considering the 90-day investment horizon Oriental Culture Holding is expected to generate 1.22 times more return on investment than IPower. However, Oriental Culture is 1.22 times more volatile than iPower Inc. It trades about 0.16 of its potential returns per unit of risk. iPower Inc is currently generating about -0.1 per unit of risk. If you would invest  117.00  in Oriental Culture Holding on December 29, 2024 and sell it today you would earn a total of  82.00  from holding Oriental Culture Holding or generate 70.09% return on investment over 90 days.

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

Oriental Culture Holding  vs.  iPower Inc

Oriental Culture Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oriental Culture Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Oriental Culture reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Oriental Culture and IPower

The main advantage of trading using opposite Oriental Culture and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Culture 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 Oriental Culture Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.