Correlation Between Guardforce and Revelation Biosciences

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

Diversification Opportunities for Guardforce and Revelation Biosciences

0.25

Correlation Coefficient

Guardforce  Revelation Biosciences

Modest diversification

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

Pair Corralation between Guardforce and Revelation Biosciences

Assuming the 90 days horizon Guardforce AI Co is expected to under-perform the Revelation Biosciences. In addition to that, Guardforce is 2.37 times more volatile than Revelation Biosciences. It trades about -0.03 of its total potential returns per unit of risk. Revelation Biosciences is currently generating about 0.02 per unit of volatility. If you would invest  1.39  in Revelation Biosciences on September 3, 2024 and sell it today you would lose (0.17) from holding Revelation Biosciences or give up 12.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	73.44%
Values	Daily Returns

Guardforce AI Co  vs.  Revelation Biosciences

Guardforce AI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardforce AI Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Revelation Biosciences

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Revelation Biosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, Revelation Biosciences may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guardforce and Revelation Biosciences

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

The idea behind Guardforce AI Co and Revelation Biosciences 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.