Correlation Between Guardforce and Workiva

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

Diversification Opportunities for Guardforce and Workiva

0.38

Correlation Coefficient

Guardforce  Workiva

Weak diversification

The 3 months correlation between Guardforce and Workiva is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva 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 Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of Guardforce i.e., Guardforce and Workiva go up and down completely randomly.

Pair Corralation between Guardforce and Workiva

Assuming the 90 days horizon Guardforce AI Co is expected to generate 48.62 times more return on investment than Workiva. However, Guardforce is 48.62 times more volatile than Workiva. It trades about 0.12 of its potential returns per unit of risk. Workiva is currently generating about 0.04 per unit of risk. If you would invest  2.00  in Guardforce AI Co on September 18, 2024 and sell it today you would earn a total of  23.00  from holding Guardforce AI Co or generate 1150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.84%
Values	Daily Returns

Guardforce AI Co  vs.  Workiva

Guardforce AI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 10 (%) 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.

Workiva

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Workiva are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal forward-looking signals, Workiva disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and Workiva

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

The idea behind Guardforce AI Co and Workiva 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.