Correlation Between Iveda Solutions and Edible Garden

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

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

Diversification Opportunities for Iveda Solutions and Edible Garden

-0.16

Correlation Coefficient

Iveda Solutions  Edible Garden

Good diversification

The 3 months correlation between Iveda and Edible is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions Warrant and Edible Garden AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edible Garden AG 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 Warrant are associated (or correlated) with Edible Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edible Garden AG has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Edible Garden go up and down completely randomly.

Pair Corralation between Iveda Solutions and Edible Garden

Assuming the 90 days horizon Iveda Solutions Warrant is expected to generate 2.97 times more return on investment than Edible Garden. However, Iveda Solutions is 2.97 times more volatile than Edible Garden AG. It trades about 0.39 of its potential returns per unit of risk. Edible Garden AG is currently generating about 0.07 per unit of risk. If you would invest  1.64  in Iveda Solutions Warrant on September 5, 2024 and sell it today you would earn a total of  4.35  from holding Iveda Solutions Warrant or generate 265.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.67%
Values	Daily Returns

Iveda Solutions Warrant  vs.  Edible Garden AG

Iveda Solutions Warrant

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions Warrant are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Iveda Solutions showed solid returns over the last few months and may actually be approaching a breakup point.

Edible Garden AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Edible Garden AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Edible Garden showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iveda Solutions and Edible Garden

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

The idea behind Iveda Solutions Warrant and Edible Garden AG 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.