Correlation Between Guardforce and First Responder

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

Diversification Opportunities for Guardforce and First Responder

0.15

Correlation Coefficient

Guardforce  First Responder

Average diversification

The 3 months correlation between Guardforce and First is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and First Responder Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Responder Tech 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 First Responder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Responder Tech has no effect on the direction of Guardforce i.e., Guardforce and First Responder go up and down completely randomly.

Pair Corralation between Guardforce and First Responder

Assuming the 90 days horizon Guardforce AI Co is expected to under-perform the First Responder. But the stock apears to be less risky and, when comparing its historical volatility, Guardforce AI Co is 2.21 times less risky than First Responder. The stock trades about 0.0 of its potential returns per unit of risk. The First Responder Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  22.00  in First Responder Technologies on August 31, 2024 and sell it today you would lose (20.61) from holding First Responder Technologies or give up 93.68% of portfolio value over 90 days.

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

Guardforce AI Co  vs.  First Responder Technologies

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 latest abnormal performance, the Stock's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

First Responder Tech

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in First Responder Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, First Responder reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and First Responder

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

The idea behind Guardforce AI Co and First Responder Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.