Correlation Between DEFSEC Technologies and Iveda Solutions

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

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

Diversification Opportunities for DEFSEC Technologies and Iveda Solutions

-0.07

Correlation Coefficient

DEFSEC Technologies  Iveda Solutions

Good diversification

The 3 months correlation between DEFSEC and Iveda is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding DEFSEC Technologies and Iveda Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iveda Solutions and DEFSEC Technologies 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 DEFSEC Technologies 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 DEFSEC Technologies i.e., DEFSEC Technologies and Iveda Solutions go up and down completely randomly.

Pair Corralation between DEFSEC Technologies and Iveda Solutions

Given the investment horizon of 90 days DEFSEC Technologies is expected to generate 0.81 times more return on investment than Iveda Solutions. However, DEFSEC Technologies is 1.23 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 -0.09 per unit of risk. If you would invest  324.00  in DEFSEC Technologies on August 20, 2025 and sell it today you would lose (21.00) from holding DEFSEC Technologies or give up 6.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

DEFSEC Technologies  vs.  Iveda Solutions

DEFSEC Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DEFSEC Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DEFSEC Technologies may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Iveda Solutions

Risk-Adjusted Performance

Weakest

Over the last 90 days Iveda Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with DEFSEC Technologies and Iveda Solutions

The main advantage of trading using opposite DEFSEC Technologies and Iveda Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DEFSEC Technologies 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 DEFSEC Technologies 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..