Correlation Between Iveda Solutions and Vivid Seats

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

Diversification Opportunities for Iveda Solutions and Vivid Seats

0.02

Correlation Coefficient

Iveda Solutions  Vivid Seats

Significant diversification

The 3 months correlation between Iveda and Vivid is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions Warrant and Vivid Seats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivid Seats 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 Vivid Seats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivid Seats has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Vivid Seats go up and down completely randomly.

Pair Corralation between Iveda Solutions and Vivid Seats

Assuming the 90 days horizon Iveda Solutions Warrant is expected to generate 11.13 times more return on investment than Vivid Seats. However, Iveda Solutions is 11.13 times more volatile than Vivid Seats. It trades about 0.44 of its potential returns per unit of risk. Vivid Seats is currently generating about 0.15 per unit of risk. If you would invest  3.95  in Iveda Solutions Warrant on September 28, 2024 and sell it today you would earn a total of  14.05  from holding Iveda Solutions Warrant or generate 355.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Iveda Solutions Warrant  vs.  Vivid Seats

Iveda Solutions Warrant

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions Warrant are ranked lower than 29 (%) 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.

Vivid Seats

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vivid Seats are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Vivid Seats may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Iveda Solutions and Vivid Seats

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

The idea behind Iveda Solutions Warrant and Vivid Seats 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.