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

0.62

Correlation Coefficient

Qurate Retail  IPower

Poor diversification

The 3 months correlation between Qurate and IPower is 0.62. 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 is expected to generate 31.04 times less return on investment than IPower. But when comparing it to its historical volatility, Qurate Retail Series is 1.58 times less risky than IPower. It trades about 0.0 of its potential returns per unit of risk. iPower Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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	Significant
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 weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing 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 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.