Correlation Between Iveda Solutions and Costar Tech
Can any of the company-specific risk be diversified away by investing in both Iveda Solutions and Costar Tech 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 Costar Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iveda Solutions and Costar Tech, you can compare the effects of market volatilities on Iveda Solutions and Costar Tech 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 Costar Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iveda Solutions and Costar Tech.
Diversification Opportunities for Iveda Solutions and Costar Tech
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iveda and Costar is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions and Costar Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costar Tech 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 are associated (or correlated) with Costar Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costar Tech has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Costar Tech go up and down completely randomly.
Pair Corralation between Iveda Solutions and Costar Tech
Given the investment horizon of 90 days Iveda Solutions is expected to generate 3.52 times less return on investment than Costar Tech. In addition to that, Iveda Solutions is 4.62 times more volatile than Costar Tech. It trades about 0.01 of its total potential returns per unit of risk. Costar Tech is currently generating about 0.12 per unit of volatility. If you would invest 391.00 in Costar Tech on August 29, 2024 and sell it today you would earn a total of 117.00 from holding Costar Tech or generate 29.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.52% |
| Values | Daily Returns |
Iveda Solutions vs. Costar Tech
Performance |
| Timeline |
| Iveda Solutions |
| Costar Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Iveda Solutions and Costar Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iveda Solutions and Costar Tech
The main advantage of trading using opposite Iveda Solutions and Costar Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iveda Solutions position performs unexpectedly, Costar Tech 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 Costar Tech will offset losses from the drop in Costar Tech's long position.| Iveda Solutions vs. Guardforce AI Co | Iveda Solutions vs. Bridger Aerospace Group | Iveda Solutions vs. Supercom | Iveda Solutions vs. Guardforce AI Co |
| Costar Tech vs. Guardforce AI Co | Costar Tech vs. Iveda Solutions | Costar Tech vs. Bridger Aerospace Group | Costar Tech vs. Supercom |
Check out your portfolio center.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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