Correlation Between American Rebel and Guardforce

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

By analyzing existing cross correlation between American Rebel Holdings and Guardforce AI Co, you can compare the effects of market volatilities on American Rebel and Guardforce 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 American Rebel with a short position of Guardforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Rebel and Guardforce.

Diversification Opportunities for American Rebel and Guardforce

0.14

Correlation Coefficient

American Rebel  Guardforce

Average diversification

The 3 months correlation between American and Guardforce is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding American Rebel Holdings and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and American Rebel 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 American Rebel Holdings are associated (or correlated) with Guardforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardforce AI has no effect on the direction of American Rebel i.e., American Rebel and Guardforce go up and down completely randomly.

Pair Corralation between American Rebel and Guardforce

Assuming the 90 days horizon American Rebel Holdings is expected to generate 6.53 times more return on investment than Guardforce. However, American Rebel is 6.53 times more volatile than Guardforce AI Co. It trades about 0.13 of its potential returns per unit of risk. Guardforce AI Co is currently generating about -0.03 per unit of risk. If you would invest  1.50  in American Rebel Holdings on September 2, 2024 and sell it today you would lose (0.68) from holding American Rebel Holdings or give up 45.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	82.46%
Values	Daily Returns

American Rebel Holdings  vs.  Guardforce AI Co

American Rebel Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Rebel Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, American Rebel showed solid returns over the last few months and may actually be approaching a breakup point.

Guardforce AI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardforce AI Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with American Rebel and Guardforce

The main advantage of trading using opposite American Rebel and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Rebel position performs unexpectedly, Guardforce 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 Guardforce will offset losses from the drop in Guardforce's long position.

The idea behind American Rebel Holdings and Guardforce AI Co 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.