Correlation Between Guardforce and BIO Key

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

Diversification Opportunities for Guardforce and BIO Key

0.06

Correlation Coefficient

Guardforce  BIO Key

Significant diversification

The 3 months correlation between Guardforce and BIO is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and BIO Key International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO Key International 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 BIO Key. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO Key International has no effect on the direction of Guardforce i.e., Guardforce and BIO Key go up and down completely randomly.

Pair Corralation between Guardforce and BIO Key

Given the investment horizon of 90 days Guardforce AI Co is expected to generate 0.61 times more return on investment than BIO Key. However, Guardforce AI Co is 1.65 times less risky than BIO Key. It trades about -0.05 of its potential returns per unit of risk. BIO Key International is currently generating about -0.04 per unit of risk. If you would invest  585.00  in Guardforce AI Co on September 24, 2024 and sell it today you would lose (476.00) from holding Guardforce AI Co or give up 81.37% of portfolio value over 90 days.

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

Guardforce AI Co  vs.  BIO Key International

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.

BIO Key International

Risk-Adjusted Performance

1 of 100

Very Weak

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

Pair Trading with Guardforce and BIO Key

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

The idea behind Guardforce AI Co and BIO Key International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.