Correlation Between Boxed and Ipower

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Can any of the company-specific risk be diversified away by investing in both Boxed 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 Boxed and Ipower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boxed Inc and Ipower Inc, you can compare the effects of market volatilities on Boxed 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 Boxed with a short position of Ipower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boxed and Ipower.

Diversification Opportunities for Boxed and Ipower

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Boxed and Ipower is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Boxed Inc and Ipower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipower Inc and Boxed 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 Boxed Inc 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 Boxed i.e., Boxed and Ipower go up and down completely randomly.

Pair Corralation between Boxed and Ipower

Given the investment horizon of 90 days Boxed Inc is expected to under-perform the Ipower. In addition to that, Boxed is 1.7 times more volatile than Ipower Inc. It trades about -0.18 of its total potential returns per unit of risk. Ipower Inc is currently generating about 0.0 per unit of volatility. If you would invest  122.00  in Ipower Inc on May 21, 2022 and sell it today you would lose (2.00)  from holding Ipower Inc or give up 1.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Boxed Inc  vs.  Ipower Inc

 Performance (%) 
       Timeline  
Boxed Inc 
Boxed Performance
0 of 100
Over the last 90 days Boxed 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 Stock's basic indicators remain rather sound which may send shares a bit higher in September 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Boxed Price Channel

Ipower Inc 
Ipower Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ipower Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Ipower Price Channel

Boxed and Ipower Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Boxed and Ipower

The main advantage of trading using opposite Boxed and Ipower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boxed 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 Boxed Inc 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.
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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