Correlation Between Guardforce and Blue Line

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

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

Diversification Opportunities for Guardforce and Blue Line

0.0

Correlation Coefficient

Guardforce  Blue Line

Pay attention - limited upside

The 3 months correlation between Guardforce and Blue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Blue Line Protection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Line Protection and Guardforce 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 Guardforce AI Co are associated (or correlated) with Blue Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Line Protection has no effect on the direction of Guardforce i.e., Guardforce and Blue Line go up and down completely randomly.

Pair Corralation between Guardforce and Blue Line

Given the investment horizon of 90 days Guardforce AI Co is expected to generate 0.42 times more return on investment than Blue Line. However, Guardforce AI Co is 2.4 times less risky than Blue Line. It trades about 0.24 of its potential returns per unit of risk. Blue Line Protection is currently generating about -0.04 per unit of risk. If you would invest  102.00  in Guardforce AI Co on September 2, 2024 and sell it today you would earn a total of  28.00  from holding Guardforce AI Co or generate 27.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Guardforce AI Co  vs.  Blue Line Protection

Guardforce AI

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Guardforce demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Blue Line Protection

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Line Protection has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Guardforce and Blue Line

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

The idea behind Guardforce AI Co and Blue Line Protection 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.