Correlation Between Guardforce and Hitek Global

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

Diversification Opportunities for Guardforce and Hitek Global

0.1

Correlation Coefficient

Guardforce  Hitek Global

Average diversification

The 3 months correlation between Guardforce and Hitek is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Hitek Global Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitek Global Ordinary 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 Hitek Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitek Global Ordinary has no effect on the direction of Guardforce i.e., Guardforce and Hitek Global go up and down completely randomly.

Pair Corralation between Guardforce and Hitek Global

Assuming the 90 days horizon Guardforce AI Co is expected to generate 7.21 times more return on investment than Hitek Global. However, Guardforce is 7.21 times more volatile than Hitek Global Ordinary. It trades about 0.12 of its potential returns per unit of risk. Hitek Global Ordinary is currently generating about 0.04 per unit of risk. If you would invest  2.00  in Guardforce AI Co on September 14, 2024 and sell it today you would earn a total of  27.00  from holding Guardforce AI Co or generate 1350.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.05%
Values	Daily Returns

Guardforce AI Co  vs.  Hitek Global Ordinary

Guardforce AI

Risk-Adjusted Performance

11 of 100

Good

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 abnormal forward indicators, Guardforce showed solid returns over the last few months and may actually be approaching a breakup point.

Hitek Global Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hitek Global Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Hitek Global is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Guardforce and Hitek Global

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

The idea behind Guardforce AI Co and Hitek Global Ordinary 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.