Correlation Between Iveda Solutions and Rail Vision

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

Diversification Opportunities for Iveda Solutions and Rail Vision

0.52

Correlation Coefficient

Iveda Solutions  Rail Vision

Very weak diversification

The 3 months correlation between Iveda and Rail is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions Warrant and Rail Vision Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rail Vision 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 Rail Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rail Vision has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Rail Vision go up and down completely randomly.

Pair Corralation between Iveda Solutions and Rail Vision

Assuming the 90 days horizon Iveda Solutions is expected to generate 2.54 times less return on investment than Rail Vision. But when comparing it to its historical volatility, Iveda Solutions Warrant is 1.76 times less risky than Rail Vision. It trades about 0.09 of its potential returns per unit of risk. Rail Vision Ltd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6.20  in Rail Vision Ltd on December 26, 2024 and sell it today you would earn a total of  2.80  from holding Rail Vision Ltd or generate 45.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

Iveda Solutions Warrant  vs.  Rail Vision Ltd

Iveda Solutions Warrant

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions Warrant are ranked lower than 7 (%) 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.

Rail Vision

Risk-Adjusted Performance

OK

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

Pair Trading with Iveda Solutions and Rail Vision

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

The idea behind Iveda Solutions Warrant and Rail Vision Ltd 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.