Correlation Between Bridger Aerospace and Iveda Solutions

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

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

Diversification Opportunities for Bridger Aerospace and Iveda Solutions

0.34

Correlation Coefficient

Bridger Aerospace  Iveda Solutions

Weak diversification

The 3 months correlation between Bridger and Iveda is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and Iveda Solutions Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions Warrant and Bridger Aerospace 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 Bridger Aerospace Group 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 Warrant has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and Iveda Solutions go up and down completely randomly.

Pair Corralation between Bridger Aerospace and Iveda Solutions

Assuming the 90 days horizon Bridger Aerospace Group is expected to generate 1.01 times more return on investment than Iveda Solutions. However, Bridger Aerospace is 1.01 times more volatile than Iveda Solutions Warrant. It trades about 0.08 of its potential returns per unit of risk. Iveda Solutions Warrant is currently generating about 0.06 per unit of risk. If you would invest  4.72  in Bridger Aerospace Group on December 29, 2024 and sell it today you would earn a total of  0.34  from holding Bridger Aerospace Group or generate 7.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Bridger Aerospace Group  vs.  Iveda Solutions Warrant

Bridger Aerospace

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Iveda Solutions Warrant

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions Warrant are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Iveda Solutions showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bridger Aerospace and Iveda Solutions

The main advantage of trading using opposite Bridger Aerospace and Iveda Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridger Aerospace 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 Bridger Aerospace Group and Iveda Solutions Warrant 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.