Correlation Between Guardforce and Evolv Technologies

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

Diversification Opportunities for Guardforce and Evolv Technologies

0.14

Correlation Coefficient

Guardforce  Evolv Technologies

Average diversification

The 3 months correlation between Guardforce and Evolv is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Evolv Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolv Technologies 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 Evolv Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolv Technologies has no effect on the direction of Guardforce i.e., Guardforce and Evolv Technologies go up and down completely randomly.

Pair Corralation between Guardforce and Evolv Technologies

Assuming the 90 days horizon Guardforce AI Co is expected to generate 1.8 times more return on investment than Evolv Technologies. However, Guardforce is 1.8 times more volatile than Evolv Technologies Holdings. It trades about 0.03 of its potential returns per unit of risk. Evolv Technologies Holdings is currently generating about -0.01 per unit of risk. If you would invest  39.00  in Guardforce AI Co on December 27, 2024 and sell it today you would lose (18.99) from holding Guardforce AI Co or give up 48.69% 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.  Evolv Technologies Holdings

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.

Evolv Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolv Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Evolv Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Guardforce and Evolv Technologies

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

The idea behind Guardforce AI Co and Evolv Technologies Holdings 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 CEOs Directory module to screen CEOs from public companies around the world.