Correlation Between Guardforce and VTEX

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

Diversification Opportunities for Guardforce and VTEX

-0.21

Correlation Coefficient

Guardforce  VTEX

Very good diversification

The 3 months correlation between Guardforce and VTEX is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and VTEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTEX 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 VTEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTEX has no effect on the direction of Guardforce i.e., Guardforce and VTEX go up and down completely randomly.

Pair Corralation between Guardforce and VTEX

Assuming the 90 days horizon Guardforce AI Co is expected to generate 19.38 times more return on investment than VTEX. However, Guardforce is 19.38 times more volatile than VTEX. It trades about 0.14 of its potential returns per unit of risk. VTEX is currently generating about -0.13 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.  VTEX

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.

VTEX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VTEX 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Guardforce and VTEX

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

The idea behind Guardforce AI Co and VTEX 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.