Correlation Between Quantum and Guardforce

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

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

Diversification Opportunities for Quantum and Guardforce

0.23

Correlation Coefficient

Quantum  Guardforce

Modest diversification

The 3 months correlation between Quantum and Guardforce is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and Quantum 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 Quantum 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 Quantum i.e., Quantum and Guardforce go up and down completely randomly.

Pair Corralation between Quantum and Guardforce

Given the investment horizon of 90 days Quantum is expected to generate 5.61 times more return on investment than Guardforce. However, Quantum is 5.61 times more volatile than Guardforce AI Co. It trades about 0.26 of its potential returns per unit of risk. Guardforce AI Co is currently generating about 0.01 per unit of risk. If you would invest  503.00  in Quantum on September 23, 2024 and sell it today you would earn a total of  4,097  from holding Quantum or generate 814.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Quantum  vs.  Guardforce AI Co

Quantum

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Guardforce AI

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Guardforce is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Quantum and Guardforce

The main advantage of trading using opposite Quantum and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantum 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 Quantum 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.