Correlation Between Iveda Solutions and Nextdoor Holdings

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

Diversification Opportunities for Iveda Solutions and Nextdoor Holdings

-0.21

Correlation Coefficient

Iveda Solutions  Nextdoor Holdings

Very good diversification

The 3 months correlation between Iveda and Nextdoor is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions Warrant and Nextdoor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextdoor Holdings 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 Nextdoor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextdoor Holdings has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Nextdoor Holdings go up and down completely randomly.

Pair Corralation between Iveda Solutions and Nextdoor Holdings

Assuming the 90 days horizon Iveda Solutions Warrant is expected to generate 30.48 times more return on investment than Nextdoor Holdings. However, Iveda Solutions is 30.48 times more volatile than Nextdoor Holdings. It trades about 0.13 of its potential returns per unit of risk. Nextdoor Holdings is currently generating about 0.03 per unit of risk. If you would invest  22.00  in Iveda Solutions Warrant on September 24, 2024 and sell it today you would lose (3.00) from holding Iveda Solutions Warrant or give up 13.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.64%
Values	Daily Returns

Iveda Solutions Warrant  vs.  Nextdoor Holdings

Iveda Solutions Warrant

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions Warrant are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Iveda Solutions showed solid returns over the last few months and may actually be approaching a breakup point.

Nextdoor Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextdoor Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nextdoor Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Iveda Solutions and Nextdoor Holdings

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

The idea behind Iveda Solutions Warrant and Nextdoor Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.