Correlation Between Guardforce and Infobird

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

Diversification Opportunities for Guardforce and Infobird

0.27

Correlation Coefficient

Guardforce  Infobird

Modest diversification

The 3 months correlation between Guardforce and Infobird is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Infobird Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infobird 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 Infobird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infobird has no effect on the direction of Guardforce i.e., Guardforce and Infobird go up and down completely randomly.

Pair Corralation between Guardforce and Infobird

Assuming the 90 days horizon Guardforce AI Co is expected to generate 4.42 times more return on investment than Infobird. However, Guardforce is 4.42 times more volatile than Infobird Co. It trades about 0.11 of its potential returns per unit of risk. Infobird Co is currently generating about 0.07 per unit of risk. If you would invest  18.00  in Guardforce AI Co on September 25, 2024 and sell it today you would earn a total of  2.00  from holding Guardforce AI Co or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Guardforce AI Co  vs.  Infobird Co

Guardforce AI

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Guardforce showed solid returns over the last few months and may actually be approaching a breakup point.

Infobird

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Infobird Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Infobird exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and Infobird

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

The idea behind Guardforce AI Co and Infobird Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.