Correlation Between Guardforce and Aware

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

Diversification Opportunities for Guardforce and Aware

-0.21

Correlation Coefficient

Guardforce  Aware

Very good diversification

The 3 months correlation between Guardforce and Aware is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc 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 Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of Guardforce i.e., Guardforce and Aware go up and down completely randomly.

Pair Corralation between Guardforce and Aware

Assuming the 90 days horizon Guardforce AI Co is expected to generate 13.99 times more return on investment than Aware. However, Guardforce is 13.99 times more volatile than Aware Inc. It trades about 0.2 of its potential returns per unit of risk. Aware Inc is currently generating about 0.03 per unit of risk. If you would invest  16.00  in Guardforce AI Co on September 15, 2024 and sell it today you would earn a total of  18.00  from holding Guardforce AI Co or generate 112.5% return on investment over 90 days.

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

Guardforce AI Co  vs.  Aware Inc

Guardforce AI

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 12 (%) 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.

Aware Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aware Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Guardforce and Aware

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

The idea behind Guardforce AI Co and Aware Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..