Correlation Between Guardforce and Applovin Corp

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

Diversification Opportunities for Guardforce and Applovin Corp

-0.05

Correlation Coefficient

Guardforce  Applovin Corp

Good diversification

The 3 months correlation between Guardforce and Applovin is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Applovin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applovin Corp 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 Applovin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applovin Corp has no effect on the direction of Guardforce i.e., Guardforce and Applovin Corp go up and down completely randomly.

Pair Corralation between Guardforce and Applovin Corp

Assuming the 90 days horizon Guardforce AI Co is expected to generate 3.17 times more return on investment than Applovin Corp. However, Guardforce is 3.17 times more volatile than Applovin Corp. It trades about 0.04 of its potential returns per unit of risk. Applovin Corp is currently generating about -0.02 per unit of risk. If you would invest  35.00  in Guardforce AI Co on December 30, 2024 and sell it today you would lose (16.00) from holding Guardforce AI Co or give up 45.71% of portfolio value over 90 days.

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

Guardforce AI Co  vs.  Applovin Corp

Guardforce AI

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 2 (%) 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.

Applovin Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Applovin Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Guardforce and Applovin Corp

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

The idea behind Guardforce AI Co and Applovin Corp 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.