Correlation Between Bridger Aerospace and Guardforce

Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and Guardforce 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 Bridger Aerospace and Guardforce into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bridger Aerospace Group and Guardforce AI Co, you can compare the effects of market volatilities on Bridger Aerospace and Guardforce 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 Bridger Aerospace with a short position of Guardforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and Guardforce.

Diversification Opportunities for Bridger Aerospace and Guardforce

0.09

Correlation Coefficient

Bridger Aerospace  Guardforce

Significant diversification

The 3 months correlation between Bridger and Guardforce is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with Guardforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardforce AI has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and Guardforce go up and down completely randomly.

Pair Corralation between Bridger Aerospace and Guardforce

Assuming the 90 days horizon Bridger Aerospace is expected to generate 2.1 times less return on investment than Guardforce. But when comparing it to its historical volatility, Bridger Aerospace Group is 1.06 times less risky than Guardforce. It trades about 0.06 of its potential returns per unit of risk. Guardforce AI Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Guardforce AI Co on December 2, 2024 and sell it today you would earn a total of  8.00  from holding Guardforce AI Co or generate 47.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bridger Aerospace Group  vs.  Guardforce AI Co

Bridger Aerospace

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Guardforce AI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 8 (%) 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.

Pair Trading with Bridger Aerospace and Guardforce

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

The idea behind Bridger Aerospace Group and Guardforce AI Co 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 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.