Correlation Between Supercom and Iveda Solutions
Can any of the company-specific risk be diversified away by investing in both Supercom 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 Supercom and Iveda Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and Iveda Solutions Warrant, you can compare the effects of market volatilities on Supercom 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 Supercom with a short position of Iveda Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Iveda Solutions.
Diversification Opportunities for Supercom and Iveda Solutions
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Supercom and Iveda is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Iveda Solutions Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions Warrant and Supercom 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 Supercom 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 Warrant has no effect on the direction of Supercom i.e., Supercom and Iveda Solutions go up and down completely randomly.
Pair Corralation between Supercom and Iveda Solutions
Given the investment horizon of 90 days Supercom is expected to under-perform the Iveda Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Supercom is 11.66 times less risky than Iveda Solutions. The stock trades about -0.02 of its potential returns per unit of risk. The Iveda Solutions Warrant is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Iveda Solutions Warrant on August 30, 2024 and sell it today you would earn a total of 1.95 from holding Iveda Solutions Warrant or generate 97.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.4% |
| Values | Daily Returns |
Supercom vs. Iveda Solutions Warrant
Performance |
| Timeline |
| Supercom |
| Iveda Solutions Warrant |
Supercom and Iveda Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and Iveda Solutions
The main advantage of trading using opposite Supercom and Iveda Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom 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.| Supercom vs. Guardforce AI Co | Supercom vs. Bridger Aerospace Group | Supercom vs. Guardforce AI Co | Supercom vs. Merck Company |
| Iveda Solutions vs. Guardforce AI Co | Iveda Solutions vs. Supercom | Iveda Solutions vs. Guardforce AI Co | Iveda Solutions vs. Merck Company |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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