Correlation Between Guardforce and Banzai International

Can any of the company-specific risk be diversified away by investing in both Guardforce and Banzai International 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 Banzai International 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 Banzai International, you can compare the effects of market volatilities on Guardforce and Banzai International 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 Banzai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardforce and Banzai International.

Diversification Opportunities for Guardforce and Banzai International

-0.08

Correlation Coefficient

Guardforce  Banzai International

Good diversification

The 3 months correlation between Guardforce and Banzai is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International 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 Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Guardforce i.e., Guardforce and Banzai International go up and down completely randomly.

Pair Corralation between Guardforce and Banzai International

Assuming the 90 days horizon Guardforce AI Co is expected to generate 1.99 times more return on investment than Banzai International. However, Guardforce is 1.99 times more volatile than Banzai International. It trades about 0.14 of its potential returns per unit of risk. Banzai International is currently generating about -0.03 per unit of risk. If you would invest  14.00  in Guardforce AI Co on September 20, 2024 and sell it today you would earn a total of  12.00  from holding Guardforce AI Co or generate 85.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.13%
Values	Daily Returns

Guardforce AI Co  vs.  Banzai International

Guardforce AI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, Guardforce showed solid returns over the last few months and may actually be approaching a breakup point.

Banzai International

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Banzai International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Guardforce and Banzai International

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

The idea behind Guardforce AI Co and Banzai International 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.