Correlation Between Guardforce and Geo

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

Diversification Opportunities for Guardforce and Geo

0.28

Correlation Coefficient

Guardforce  Geo

Modest diversification

The 3 months correlation between Guardforce and Geo is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group 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 Geo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geo Group has no effect on the direction of Guardforce i.e., Guardforce and Geo go up and down completely randomly.

Pair Corralation between Guardforce and Geo

Assuming the 90 days horizon Guardforce AI Co is expected to generate 6.13 times more return on investment than Geo. However, Guardforce is 6.13 times more volatile than Geo Group. It trades about 0.05 of its potential returns per unit of risk. Geo Group is currently generating about 0.04 per unit of risk. If you would invest  35.00  in Guardforce AI Co on December 28, 2024 and sell it today you would lose (14.00) from holding Guardforce AI Co or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Guardforce AI Co  vs.  Geo Group

Guardforce AI

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 3 (%) 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.

Geo Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Geo Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Geo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Guardforce and Geo

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

The idea behind Guardforce AI Co and Geo Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.