Correlation Between Guardforce and Full Truck

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

Diversification Opportunities for Guardforce and Full Truck

0.59

Correlation Coefficient

Guardforce  Full Truck

Very weak diversification

The 3 months correlation between Guardforce and Full is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Full Truck Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Full Truck Alliance 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 Full Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Full Truck Alliance has no effect on the direction of Guardforce i.e., Guardforce and Full Truck go up and down completely randomly.

Pair Corralation between Guardforce and Full Truck

Assuming the 90 days horizon Guardforce AI Co is expected to generate 9.78 times more return on investment than Full Truck. However, Guardforce is 9.78 times more volatile than Full Truck Alliance. It trades about 0.13 of its potential returns per unit of risk. Full Truck Alliance is currently generating about 0.18 per unit of risk. If you would invest  12.00  in Guardforce AI Co on September 22, 2024 and sell it today you would earn a total of  8.00  from holding Guardforce AI Co or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.38%
Values	Daily Returns

Guardforce AI Co  vs.  Full Truck Alliance

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.

Full Truck Alliance

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Full Truck Alliance are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Full Truck displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and Full Truck

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

The idea behind Guardforce AI Co and Full Truck Alliance 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.