Correlation Between Ipower and Amazon

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

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

Diversification Opportunities for Ipower and Amazon

0.04
  Correlation Coefficient
Ipower Inc
Amazon Inc

Significant diversification

The 3 months correlation between Ipower and Amazon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ipower Inc and Amazon Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Amazon 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Ipower i.e., Ipower and Amazon go up and down completely randomly.

Pair Corralation between Ipower and Amazon

Considering the 90-day investment horizon Ipower Inc is expected to under-perform the Amazon. In addition to that, Ipower is 3.17 times more volatile than Amazon Inc. It trades about -0.1 of its total potential returns per unit of risk. Amazon Inc is currently generating about 0.16 per unit of volatility. If you would invest  328,504  in Amazon Inc on August 31, 2021 and sell it today you would earn a total of  41,102  from holding Amazon Inc or generate 12.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy97.67%
ValuesDaily Returns

Ipower Inc  vs.  Amazon Inc

 Performance (%) 
      Timeline 
Ipower Inc 
Ipower Performance
0 of 100
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 2021. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Ipower Price Channel

Amazon Inc 
Amazon Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Amazon may actually be approaching a critical reversion point that can send shares even higher in December 2021.

Amazon Price Channel

Ipower and Amazon Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Ipower and Amazon

The main advantage of trading using opposite Ipower and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ipower position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.
The idea behind Ipower Inc and Amazon 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 CEO Directory module to screen CEOs from public companies around the world.

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