Correlation Between Guardforce and Procore Technologies

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

Diversification Opportunities for Guardforce and Procore Technologies

0.25

Correlation Coefficient

Guardforce  Procore Technologies

Modest diversification

The 3 months correlation between Guardforce and Procore is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Procore Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procore Technologies 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 Procore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procore Technologies has no effect on the direction of Guardforce i.e., Guardforce and Procore Technologies go up and down completely randomly.

Pair Corralation between Guardforce and Procore Technologies

Assuming the 90 days horizon Guardforce AI Co is expected to generate 17.0 times more return on investment than Procore Technologies. However, Guardforce is 17.0 times more volatile than Procore Technologies. It trades about 0.16 of its potential returns per unit of risk. Procore Technologies is currently generating about 0.22 per unit of risk. If you would invest  13.00  in Guardforce AI Co on September 15, 2024 and sell it today you would earn a total of  21.00  from holding Guardforce AI Co or generate 161.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	81.25%
Values	Daily Returns

Guardforce AI Co  vs.  Procore Technologies

Guardforce AI

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 12 (%) 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.

Procore Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Procore Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Procore Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and Procore Technologies

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

The idea behind Guardforce AI Co and Procore Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.