Correlation Between Iveda Solutions and Gencor Industries

Can any of the company-specific risk be diversified away by investing in both Iveda Solutions and Gencor Industries 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 Gencor Industries 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 Gencor Industries, you can compare the effects of market volatilities on Iveda Solutions and Gencor Industries 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 Gencor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iveda Solutions and Gencor Industries.

Diversification Opportunities for Iveda Solutions and Gencor Industries

-0.87

Correlation Coefficient

Iveda Solutions  Gencor Industries

Pay attention - limited upside

The 3 months correlation between Iveda and Gencor is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions Warrant and Gencor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencor Industries 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 Gencor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencor Industries has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Gencor Industries go up and down completely randomly.

Pair Corralation between Iveda Solutions and Gencor Industries

Assuming the 90 days horizon Iveda Solutions Warrant is expected to generate 44.65 times more return on investment than Gencor Industries. However, Iveda Solutions is 44.65 times more volatile than Gencor Industries. It trades about 0.13 of its potential returns per unit of risk. Gencor Industries is currently generating about 0.05 per unit of risk. If you would invest  42.00  in Iveda Solutions Warrant on October 22, 2024 and sell it today you would lose (17.00) from holding Iveda Solutions Warrant or give up 40.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	59.27%
Values	Daily Returns

Iveda Solutions Warrant  vs.  Gencor Industries

Iveda Solutions Warrant

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions Warrant are ranked lower than 25 (%) 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.

Gencor Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gencor Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Iveda Solutions and Gencor Industries

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

The idea behind Iveda Solutions Warrant and Gencor Industries 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..