Correlation Between Guardforce and Trust Stamp

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

Diversification Opportunities for Guardforce and Trust Stamp

0.46

Correlation Coefficient

Guardforce  Trust Stamp

Very weak diversification

The 3 months correlation between Guardforce and Trust is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Trust Stamp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust Stamp 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 Trust Stamp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust Stamp has no effect on the direction of Guardforce i.e., Guardforce and Trust Stamp go up and down completely randomly.

Pair Corralation between Guardforce and Trust Stamp

Assuming the 90 days horizon Guardforce AI Co is expected to generate 3.04 times more return on investment than Trust Stamp. However, Guardforce is 3.04 times more volatile than Trust Stamp. It trades about 0.04 of its potential returns per unit of risk. Trust Stamp is currently generating about -0.47 per unit of risk. If you would invest  35.00  in Guardforce AI Co on December 29, 2024 and sell it today you would lose (16.00) from holding Guardforce AI Co or give up 45.71% of portfolio value over 90 days.

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

Guardforce AI Co  vs.  Trust Stamp

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.

Trust Stamp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trust Stamp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Guardforce and Trust Stamp

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

The idea behind Guardforce AI Co and Trust Stamp 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.