Correlation Between Oriental Culture and IPower

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

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

Diversification Opportunities for Oriental Culture and IPower

0.01

Correlation Coefficient

Oriental Culture  IPower

Significant diversification

The 3 months correlation between Oriental and IPower is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and iPower Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPower Inc and Oriental Culture 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 Oriental Culture Holding 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 Oriental Culture i.e., Oriental Culture and IPower go up and down completely randomly.

Pair Corralation between Oriental Culture and IPower

Considering the 90-day investment horizon Oriental Culture Holding is expected to under-perform the IPower. In addition to that, Oriental Culture is 1.05 times more volatile than iPower Inc. It trades about -0.03 of its total potential returns per unit of risk. iPower Inc is currently generating about 0.04 per unit of volatility. If you would invest  60.00  in iPower Inc on May 7, 2025 and sell it today you would earn a total of  3.00  from holding iPower Inc or generate 5.0% return on investment over 90 days.

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

Oriental Culture Holding  vs.  iPower Inc

Oriental Culture Holding

Risk-Adjusted Performance

Weakest

Over the last 90 days Oriental Culture Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

iPower Inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in iPower Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, IPower showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oriental Culture and IPower

The main advantage of trading using opposite Oriental Culture and IPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Culture 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 Oriental Culture Holding 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.