Correlation Between Guardforce and First Responder

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

Diversification Opportunities for Guardforce and First Responder

-0.23

Correlation Coefficient

Guardforce  First Responder

Very good diversification

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

Pair Corralation between Guardforce and First Responder

Assuming the 90 days horizon Guardforce AI Co is expected to generate 1.56 times more return on investment than First Responder. However, Guardforce is 1.56 times more volatile than First Responder Technologies. It trades about 0.11 of its potential returns per unit of risk. First Responder Technologies is currently generating about 0.08 per unit of risk. If you would invest  6.26  in Guardforce AI Co on October 4, 2024 and sell it today you would earn a total of  28.84  from holding Guardforce AI Co or generate 460.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.51%
Values	Daily Returns

Guardforce AI Co  vs.  First Responder Technologies

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.

First Responder Tech

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Responder Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, First Responder reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardforce and First Responder

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

The idea behind Guardforce AI Co and First Responder 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.