Correlation Between ADT and Iveda Solutions

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

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

Diversification Opportunities for ADT and Iveda Solutions

-0.01

Correlation Coefficient

ADT  Iveda Solutions

Good diversification

The 3 months correlation between ADT and Iveda is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ADT Inc and Iveda Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions and ADT 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 ADT Inc are associated (or correlated) with Iveda Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iveda Solutions has no effect on the direction of ADT i.e., ADT and Iveda Solutions go up and down completely randomly.

Pair Corralation between ADT and Iveda Solutions

Considering the 90-day investment horizon ADT Inc is expected to generate 0.34 times more return on investment than Iveda Solutions. However, ADT Inc is 2.98 times less risky than Iveda Solutions. It trades about 0.03 of its potential returns per unit of risk. Iveda Solutions is currently generating about -0.02 per unit of risk. If you would invest  648.00  in ADT Inc on September 13, 2024 and sell it today you would earn a total of  85.00  from holding ADT Inc or generate 13.12% return on investment over 90 days.

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

ADT Inc  vs.  Iveda Solutions

ADT Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ADT Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, ADT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Iveda Solutions

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Iveda Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ADT and Iveda Solutions

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

The idea behind ADT Inc and Iveda Solutions 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 Stocks Directory module to find actively traded stocks across global markets.