Correlation Between Zedcor and Iveda Solutions

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

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

Diversification Opportunities for Zedcor and Iveda Solutions

0.36

Correlation Coefficient

Zedcor  Iveda Solutions

Weak diversification

The 3 months correlation between Zedcor and Iveda is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zedcor Inc and Iveda Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions and Zedcor 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 Zedcor 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 Zedcor i.e., Zedcor and Iveda Solutions go up and down completely randomly.

Pair Corralation between Zedcor and Iveda Solutions

Assuming the 90 days horizon Zedcor Inc is expected to generate 0.46 times more return on investment than Iveda Solutions. However, Zedcor Inc is 2.16 times less risky than Iveda Solutions. It trades about 0.18 of its potential returns per unit of risk. Iveda Solutions is currently generating about 0.05 per unit of risk. If you would invest  45.00  in Zedcor Inc on October 2, 2024 and sell it today you would earn a total of  193.00  from holding Zedcor Inc or generate 428.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.57%
Values	Daily Returns

Zedcor Inc  vs.  Iveda Solutions

Zedcor Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zedcor Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zedcor reported solid returns over the last few months and may actually be approaching a breakup point.

Iveda Solutions

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions are ranked lower than 18 (%) 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 Zedcor and Iveda Solutions

The main advantage of trading using opposite Zedcor and Iveda Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedcor 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 Zedcor 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.

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 the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.