Correlation Between Guardforce and S A P

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

Diversification Opportunities for Guardforce and S A P

0.44

Correlation Coefficient

Guardforce  S A P

Very weak diversification

The 3 months correlation between Guardforce and SAP is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and SAP SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE ADR 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE ADR has no effect on the direction of Guardforce i.e., Guardforce and S A P go up and down completely randomly.

Pair Corralation between Guardforce and S A P

Assuming the 90 days horizon Guardforce AI Co is expected to generate 135.1 times more return on investment than S A P. However, Guardforce is 135.1 times more volatile than SAP SE ADR. It trades about 0.21 of its potential returns per unit of risk. SAP SE ADR is currently generating about 0.16 per unit of risk. If you would invest  20.00  in Guardforce AI Co on September 15, 2024 and sell it today you would earn a total of  14.00  from holding Guardforce AI Co or generate 70.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	73.02%
Values	Daily Returns

Guardforce AI Co  vs.  SAP SE ADR

Guardforce AI

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 12 (%) 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.

SAP SE ADR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, S A P reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and S A P

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

The idea behind Guardforce AI Co and SAP SE ADR 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.