Correlation Between NexGel Warrant and Guardforce

Can any of the company-specific risk be diversified away by investing in both NexGel Warrant and Guardforce 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 NexGel Warrant and Guardforce into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NexGel Warrant and Guardforce AI Co, you can compare the effects of market volatilities on NexGel Warrant and Guardforce 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 NexGel Warrant with a short position of Guardforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGel Warrant and Guardforce.

Diversification Opportunities for NexGel Warrant and Guardforce

0.53

Correlation Coefficient

NexGel Warrant  Guardforce

Very weak diversification

The 3 months correlation between NexGel and Guardforce is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NexGel Warrant and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and NexGel Warrant 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 NexGel Warrant are associated (or correlated) with Guardforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardforce AI has no effect on the direction of NexGel Warrant i.e., NexGel Warrant and Guardforce go up and down completely randomly.

Pair Corralation between NexGel Warrant and Guardforce

Assuming the 90 days horizon NexGel Warrant is expected to generate 1.76 times more return on investment than Guardforce. However, NexGel Warrant is 1.76 times more volatile than Guardforce AI Co. It trades about -0.01 of its potential returns per unit of risk. Guardforce AI Co is currently generating about -0.26 per unit of risk. If you would invest  61.00  in NexGel Warrant on December 2, 2024 and sell it today you would lose (5.00) from holding NexGel Warrant or give up 8.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

NexGel Warrant  vs.  Guardforce AI Co

NexGel Warrant

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NexGel Warrant are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, NexGel Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Guardforce AI

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Guardforce demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NexGel Warrant and Guardforce

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

The idea behind NexGel Warrant and Guardforce AI Co 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.