Correlation Between Geo and Iveda Solutions

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

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

Diversification Opportunities for Geo and Iveda Solutions

0.54

Correlation Coefficient

Geo  Iveda Solutions

Very weak diversification

The 3 months correlation between Geo and Iveda is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Geo Group and Iveda Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions and Geo 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 Geo 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 has no effect on the direction of Geo i.e., Geo and Iveda Solutions go up and down completely randomly.

Pair Corralation between Geo and Iveda Solutions

Considering the 90-day investment horizon Geo is expected to generate 1.51 times less return on investment than Iveda Solutions. But when comparing it to its historical volatility, Geo Group is 3.47 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 0.01 of returns per unit of risk over similar time horizon. If you would invest  384.00  in Iveda Solutions on December 26, 2024 and sell it today you would lose (105.00) from holding Iveda Solutions or give up 27.34% of portfolio value over 90 days.

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

Geo Group  vs.  Iveda Solutions

Geo Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Geo Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Geo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Iveda Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Iveda Solutions may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Geo and Iveda Solutions

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