Correlation Between IPower and Berry Global

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

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

Diversification Opportunities for IPower and Berry Global

-0.64

Correlation Coefficient

IPower  Berry Global

Excellent diversification

The 3 months correlation between IPower and Berry is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and Berry Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berry Global Group 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 Berry Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berry Global Group has no effect on the direction of IPower i.e., IPower and Berry Global go up and down completely randomly.

Pair Corralation between IPower and Berry Global

Considering the 90-day investment horizon iPower Inc is expected to under-perform the Berry Global. In addition to that, IPower is 7.87 times more volatile than Berry Global Group. It trades about -0.02 of its total potential returns per unit of risk. Berry Global Group is currently generating about 0.16 per unit of volatility. If you would invest  6,295  in Berry Global Group on August 30, 2024 and sell it today you would earn a total of  862.00  from holding Berry Global Group or generate 13.69% 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.  Berry Global Group

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 December 2024. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Berry Global Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Berry Global Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Berry Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IPower and Berry Global

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

The idea behind iPower Inc and Berry Global Group 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.