Correlation Between IPower and HomesToLife

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

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

Diversification Opportunities for IPower and HomesToLife

0.27

Correlation Coefficient

IPower  HomesToLife

Modest diversification

The 3 months correlation between IPower and HomesToLife is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding iPower Inc and HomesToLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomesToLife 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 HomesToLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomesToLife has no effect on the direction of IPower i.e., IPower and HomesToLife go up and down completely randomly.

Pair Corralation between IPower and HomesToLife

Considering the 90-day investment horizon iPower Inc is expected to under-perform the HomesToLife. In addition to that, IPower is 2.41 times more volatile than HomesToLife. It trades about -0.03 of its total potential returns per unit of risk. HomesToLife is currently generating about 0.12 per unit of volatility. If you would invest  366.00  in HomesToLife on February 17, 2025 and sell it today you would earn a total of  19.00  from holding HomesToLife or generate 5.19% return on investment over 90 days.

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

iPower Inc  vs.  HomesToLife

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 June 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

HomesToLife

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HomesToLife are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, HomesToLife is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IPower and HomesToLife

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

The idea behind iPower Inc and HomesToLife 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.