Correlation Between Iveda Solutions and Desktop Metal

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

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

Diversification Opportunities for Iveda Solutions and Desktop Metal

-0.85

Correlation Coefficient

Iveda Solutions  Desktop Metal

Pay attention - limited upside

The 3 months correlation between Iveda and Desktop is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal and Iveda Solutions 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 Iveda Solutions are associated (or correlated) with Desktop Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desktop Metal has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Desktop Metal go up and down completely randomly.

Pair Corralation between Iveda Solutions and Desktop Metal

Given the investment horizon of 90 days Iveda Solutions is expected to generate 3.0 times more return on investment than Desktop Metal. However, Iveda Solutions is 3.0 times more volatile than Desktop Metal. It trades about 0.17 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.23 per unit of risk. If you would invest  166.00  in Iveda Solutions on October 21, 2024 and sell it today you would earn a total of  256.00  from holding Iveda Solutions or generate 154.22% return on investment over 90 days.

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

Iveda Solutions  vs.  Desktop Metal

Iveda Solutions

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions are ranked lower than 13 (%) 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.

Desktop Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Desktop Metal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Iveda Solutions and Desktop Metal

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

The idea behind Iveda Solutions and Desktop Metal 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.