Correlation Between Guardforce and MicroStrategy Incorporated

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

Diversification Opportunities for Guardforce and MicroStrategy Incorporated

-0.01

Correlation Coefficient

Guardforce  MicroStrategy Incorporated

Good diversification

The 3 months correlation between Guardforce and MicroStrategy is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and MicroStrategy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroStrategy Incorporated 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 MicroStrategy Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroStrategy Incorporated has no effect on the direction of Guardforce i.e., Guardforce and MicroStrategy Incorporated go up and down completely randomly.

Pair Corralation between Guardforce and MicroStrategy Incorporated

Assuming the 90 days horizon Guardforce AI Co is expected to generate 5.63 times more return on investment than MicroStrategy Incorporated. However, Guardforce is 5.63 times more volatile than MicroStrategy Incorporated. It trades about 0.15 of its potential returns per unit of risk. MicroStrategy Incorporated is currently generating about 0.28 per unit of risk. If you would invest  13.00  in Guardforce AI Co on September 13, 2024 and sell it today you would earn a total of  16.00  from holding Guardforce AI Co or generate 123.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.37%
Values	Daily Returns

Guardforce AI Co  vs.  MicroStrategy Incorporated

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.

MicroStrategy Incorporated

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MicroStrategy Incorporated are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, MicroStrategy Incorporated reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and MicroStrategy Incorporated

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

The idea behind Guardforce AI Co and MicroStrategy Incorporated 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.