Correlation Between Qurate Retail and IPower

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

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

Diversification Opportunities for Qurate Retail and IPower

0.83

Correlation Coefficient

Qurate Retail  IPower

Very poor diversification

The 3 months correlation between Qurate and IPower is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and Qurate Retail 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 Qurate Retail Series 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 Qurate Retail i.e., Qurate Retail and IPower go up and down completely randomly.

Pair Corralation between Qurate Retail and IPower

Assuming the 90 days horizon Qurate Retail Series is expected to under-perform the IPower. But the stock apears to be less risky and, when comparing its historical volatility, Qurate Retail Series is 2.06 times less risky than IPower. The stock trades about -0.04 of its potential returns per unit of risk. The iPower Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  121.00  in iPower Inc on September 4, 2024 and sell it today you would lose (40.00) from holding iPower Inc or give up 33.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Qurate Retail Series  vs.  iPower Inc

Qurate Retail Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 fairly stable basic indicators, IPower is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Qurate Retail and IPower

The main advantage of trading using opposite Qurate Retail and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail 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 Qurate Retail Series 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.