Correlation Between Iveda Solutions and Kimball Electronics

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

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

Diversification Opportunities for Iveda Solutions and Kimball Electronics

-0.04

Correlation Coefficient

Iveda Solutions  Kimball Electronics

Good diversification

The 3 months correlation between Iveda and Kimball is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics 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 Kimball Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimball Electronics has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Kimball Electronics go up and down completely randomly.

Pair Corralation between Iveda Solutions and Kimball Electronics

Given the investment horizon of 90 days Iveda Solutions is expected to generate 3.56 times more return on investment than Kimball Electronics. However, Iveda Solutions is 3.56 times more volatile than Kimball Electronics. It trades about 0.0 of its potential returns per unit of risk. Kimball Electronics is currently generating about -0.02 per unit of risk. If you would invest  2,176  in Iveda Solutions on October 6, 2024 and sell it today you would lose (1,616) from holding Iveda Solutions or give up 74.26% of portfolio value over 90 days.

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

Iveda Solutions  vs.  Kimball Electronics

Iveda Solutions

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions are ranked lower than 16 (%) 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.

Kimball Electronics

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Kimball Electronics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Iveda Solutions and Kimball Electronics

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

The idea behind Iveda Solutions and Kimball Electronics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.