Correlation Between NL Industries and Iveda Solutions
Can any of the company-specific risk be diversified away by investing in both NL Industries 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 NL Industries and Iveda Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NL Industries and Iveda Solutions, you can compare the effects of market volatilities on NL Industries 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 NL Industries with a short position of Iveda Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of NL Industries and Iveda Solutions.
Diversification Opportunities for NL Industries and Iveda Solutions
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NL Industries and Iveda is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries and Iveda Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions and NL Industries 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 NL Industries 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 NL Industries i.e., NL Industries and Iveda Solutions go up and down completely randomly.
Pair Corralation between NL Industries and Iveda Solutions
Allowing for the 90-day total investment horizon NL Industries is expected to generate 4.44 times less return on investment than Iveda Solutions. But when comparing it to its historical volatility, NL Industries is 3.03 times less risky than Iveda Solutions. It trades about 0.06 of its potential returns per unit of risk. Iveda Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 166.00 in Iveda Solutions on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Iveda Solutions or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NL Industries vs. Iveda Solutions
Performance |
| Timeline |
| NL Industries |
| Iveda Solutions |
NL Industries and Iveda Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NL Industries and Iveda Solutions
The main advantage of trading using opposite NL Industries and Iveda Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries 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.| NL Industries vs. Park Electrochemical | NL Industries vs. Innovative Solutions and | NL Industries vs. Curtiss Wright | NL Industries vs. National Presto Industries |
| Iveda Solutions vs. Guardforce AI Co | Iveda Solutions vs. Bridger Aerospace Group | Iveda Solutions vs. Supercom | Iveda Solutions vs. Guardforce AI Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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