Correlation Between Guardforce and Braze

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

Diversification Opportunities for Guardforce and Braze

0.48

Correlation Coefficient

Guardforce  Braze

Very weak diversification

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

Pair Corralation between Guardforce and Braze

Assuming the 90 days horizon Guardforce AI Co is expected to generate 33.83 times more return on investment than Braze. However, Guardforce is 33.83 times more volatile than Braze Inc. It trades about 0.11 of its potential returns per unit of risk. Braze Inc is currently generating about 0.05 per unit of risk. If you would invest  4.00  in Guardforce AI Co on September 21, 2024 and sell it today you would earn a total of  22.00  from holding Guardforce AI Co or generate 550.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.24%
Values	Daily Returns

Guardforce AI Co  vs.  Braze Inc

Guardforce AI

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Guardforce showed solid returns over the last few months and may actually be approaching a breakup point.

Braze Inc

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Braze Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Braze exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and Braze

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

The idea behind Guardforce AI Co and Braze 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.