Correlation Between Guardforce and TC BioPharm

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

Diversification Opportunities for Guardforce and TC BioPharm

-0.23

Correlation Coefficient

Guardforce  TC BioPharm

Very good diversification

The 3 months correlation between Guardforce and TCBPW is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and TC BioPharm plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC BioPharm plc 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 TC BioPharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC BioPharm plc has no effect on the direction of Guardforce i.e., Guardforce and TC BioPharm go up and down completely randomly.

Pair Corralation between Guardforce and TC BioPharm

Assuming the 90 days horizon Guardforce AI Co is expected to generate 1.36 times more return on investment than TC BioPharm. However, Guardforce is 1.36 times more volatile than TC BioPharm plc. It trades about 0.04 of its potential returns per unit of risk. TC BioPharm plc is currently generating about 0.03 per unit of risk. If you would invest  35.00  in Guardforce AI Co on December 30, 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 Against
Strength	Insignificant
Accuracy	90.32%
Values	Daily Returns

Guardforce AI Co  vs.  TC BioPharm plc

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.

TC BioPharm plc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TC BioPharm plc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TC BioPharm showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and TC BioPharm

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

The idea behind Guardforce AI Co and TC BioPharm plc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.