Correlation Between SSC Security and Iveda Solutions

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

By analyzing existing cross correlation between SSC Security Services and Iveda Solutions, you can compare the effects of market volatilities on SSC Security and Iveda Solutions 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 SSC Security with a short position of Iveda Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Security and Iveda Solutions.

Diversification Opportunities for SSC Security and Iveda Solutions

-0.03

Correlation Coefficient

SSC Security  Iveda Solutions

Good diversification

The 3 months correlation between SSC and Iveda is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Iveda Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions and SSC Security 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 SSC Security Services are associated (or correlated) with Iveda Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iveda Solutions has no effect on the direction of SSC Security i.e., SSC Security and Iveda Solutions go up and down completely randomly.

Pair Corralation between SSC Security and Iveda Solutions

Assuming the 90 days horizon SSC Security is expected to generate 4.73 times less return on investment than Iveda Solutions. But when comparing it to its historical volatility, SSC Security Services is 1.93 times less risky than Iveda Solutions. It trades about 0.02 of its potential returns per unit of risk. Iveda Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  448.00  in Iveda Solutions on October 2, 2024 and sell it today you would earn a total of  71.00  from holding Iveda Solutions or generate 15.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.56%
Values	Daily Returns

SSC Security Services  vs.  Iveda Solutions

SSC Security Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Iveda Solutions

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Iveda Solutions are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Iveda Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSC Security and Iveda Solutions

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

The idea behind SSC Security Services and Iveda Solutions 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.