Correlation Between Brady and Guardforce

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

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

Diversification Opportunities for Brady and Guardforce

0.39

Correlation Coefficient

Brady  Guardforce

Weak diversification

The 3 months correlation between Brady and Guardforce is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Brady and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and Brady 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 Brady 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 Brady i.e., Brady and Guardforce go up and down completely randomly.

Pair Corralation between Brady and Guardforce

Considering the 90-day investment horizon Brady is expected to generate 0.31 times more return on investment than Guardforce. However, Brady is 3.18 times less risky than Guardforce. It trades about 0.1 of its potential returns per unit of risk. Guardforce AI Co is currently generating about -0.1 per unit of risk. If you would invest  5,917  in Brady on September 24, 2024 and sell it today you would earn a total of  1,496  from holding Brady or generate 25.28% return on investment over 90 days.

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

Brady  vs.  Guardforce AI Co

Brady

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brady has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Brady is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Guardforce AI

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Guardforce may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Brady and Guardforce

The main advantage of trading using opposite Brady and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brady 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 Brady 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.