Correlation Between Iveda Solutions and Zhihu
Can any of the company-specific risk be diversified away by investing in both Iveda Solutions and Zhihu 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 Zhihu 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 Zhihu Inc ADR, you can compare the effects of market volatilities on Iveda Solutions and Zhihu 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 Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iveda Solutions and Zhihu.
Diversification Opportunities for Iveda Solutions and Zhihu
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iveda and Zhihu is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Iveda Solutions Warrant and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR 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 Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of Iveda Solutions i.e., Iveda Solutions and Zhihu go up and down completely randomly.
Pair Corralation between Iveda Solutions and Zhihu
Assuming the 90 days horizon Iveda Solutions Warrant is expected to generate 24.78 times more return on investment than Zhihu. However, Iveda Solutions is 24.78 times more volatile than Zhihu Inc ADR. It trades about 0.13 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.01 per unit of risk. If you would invest 12.00 in Iveda Solutions Warrant on September 20, 2024 and sell it today you would earn a total of 3.00 from holding Iveda Solutions Warrant or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.39% |
| Values | Daily Returns |
Iveda Solutions Warrant vs. Zhihu Inc ADR
Performance |
| Timeline |
| Iveda Solutions Warrant |
| Zhihu Inc ADR |
Iveda Solutions and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iveda Solutions and Zhihu
The main advantage of trading using opposite Iveda Solutions and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iveda Solutions position performs unexpectedly, Zhihu 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 Zhihu will offset losses from the drop in Zhihu's long position.| Iveda Solutions vs. IONQ Inc | Iveda Solutions vs. Quantum | Iveda Solutions vs. Super Micro Computer | Iveda Solutions vs. Red Cat Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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