Correlation Between IPower and MOGU

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

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

Diversification Opportunities for IPower and MOGU

0.35

Correlation Coefficient

IPower  MOGU

Weak diversification

The 3 months correlation between IPower and MOGU is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU 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 MOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOGU Inc has no effect on the direction of IPower i.e., IPower and MOGU go up and down completely randomly.

Pair Corralation between IPower and MOGU

Considering the 90-day investment horizon iPower Inc is expected to generate 1.87 times more return on investment than MOGU. However, IPower is 1.87 times more volatile than MOGU Inc. It trades about 0.05 of its potential returns per unit of risk. MOGU Inc is currently generating about 0.02 per unit of risk. If you would invest  52.00  in iPower Inc on August 30, 2024 and sell it today you would earn a total of  27.10  from holding iPower Inc or generate 52.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.59%
Values	Daily Returns

iPower Inc  vs.  MOGU Inc

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.

MOGU Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, MOGU unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IPower and MOGU

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

The idea behind iPower Inc and MOGU 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.