Correlation Between QRTEA Old and IPower

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

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

Diversification Opportunities for QRTEA Old and IPower

0.42

Correlation Coefficient

QRTEA Old  IPower

Very weak diversification

The 3 months correlation between QRTEA and IPower is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding QRTEA Old and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and QRTEA Old 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 QRTEA Old 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 QRTEA Old i.e., QRTEA Old and IPower go up and down completely randomly.

Pair Corralation between QRTEA Old and IPower

Assuming the 90 days horizon QRTEA Old is expected to generate 0.69 times more return on investment than IPower. However, QRTEA Old is 1.45 times less risky than IPower. It trades about 0.08 of its potential returns per unit of risk. iPower Inc is currently generating about -0.1 per unit of risk. If you would invest  33.00  in QRTEA Old on December 28, 2024 and sell it today you would earn a total of  3.00  from holding QRTEA Old or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	60.66%
Values	Daily Returns

QRTEA Old  vs.  iPower Inc

QRTEA Old

Risk-Adjusted Performance

Modest

Over the last 90 days QRTEA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak technical and fundamental indicators, QRTEA Old sustained 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 QRTEA Old and IPower

The main advantage of trading using opposite QRTEA Old and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QRTEA Old 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 QRTEA Old 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.