Correlation Between Guardforce and Southern California

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

Diversification Opportunities for Guardforce and Southern California

-0.48

Correlation Coefficient

Guardforce  Southern California

Very good diversification

The 3 months correlation between Guardforce and Southern is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Southern California Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern California Gas 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 Southern California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern California Gas has no effect on the direction of Guardforce i.e., Guardforce and Southern California go up and down completely randomly.

Pair Corralation between Guardforce and Southern California

Given the investment horizon of 90 days Guardforce AI Co is expected to generate 4.03 times more return on investment than Southern California. However, Guardforce is 4.03 times more volatile than Southern California Gas. It trades about 0.04 of its potential returns per unit of risk. Southern California Gas is currently generating about 0.01 per unit of risk. If you would invest  660.00  in Guardforce AI Co on October 11, 2024 and sell it today you would lose (447.00) from holding Guardforce AI Co or give up 67.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	56.65%
Values	Daily Returns

Guardforce AI Co  vs.  Southern California Gas

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. Despite fairly weak basic indicators, Guardforce demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Southern California Gas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern California Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Guardforce and Southern California

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

The idea behind Guardforce AI Co and Southern California Gas 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.