Correlation Between Iveda Solutions and MSA Safety

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

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

Diversification Opportunities for Iveda Solutions and MSA Safety

-0.12

Correlation Coefficient

Iveda Solutions  MSA Safety

Good diversification

The 3 months correlation between Iveda and MSA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions and MSA Safety in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety 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 MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and MSA Safety go up and down completely randomly.

Pair Corralation between Iveda Solutions and MSA Safety

Given the investment horizon of 90 days Iveda Solutions is expected to generate 5.81 times more return on investment than MSA Safety. However, Iveda Solutions is 5.81 times more volatile than MSA Safety. It trades about 0.04 of its potential returns per unit of risk. MSA Safety is currently generating about 0.04 per unit of risk. If you would invest  592.00  in Iveda Solutions on October 5, 2024 and sell it today you would lose (14.00) from holding Iveda Solutions or give up 2.36% 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.  MSA Safety

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.

MSA Safety

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MSA Safety has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MSA Safety is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Iveda Solutions and MSA Safety

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

The idea behind Iveda Solutions and MSA Safety 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.