Correlation Between SSC Security and Guardforce

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

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

Diversification Opportunities for SSC Security and Guardforce

0.63

Correlation Coefficient

SSC Security  Guardforce

Poor diversification

The 3 months correlation between SSC and Guardforce is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and SSC Security 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 SSC Security Services 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 SSC Security i.e., SSC Security and Guardforce go up and down completely randomly.

Pair Corralation between SSC Security and Guardforce

Assuming the 90 days horizon SSC Security Services is expected to generate 1.22 times more return on investment than Guardforce. However, SSC Security is 1.22 times more volatile than Guardforce AI Co. It trades about 0.03 of its potential returns per unit of risk. Guardforce AI Co is currently generating about -0.08 per unit of risk. If you would invest  184.00  in SSC Security Services on September 23, 2024 and sell it today you would lose (3.00) from holding SSC Security Services or give up 1.63% of portfolio value over 90 days.

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

SSC Security Services  vs.  Guardforce AI Co

SSC Security Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 SSC Security and Guardforce

The main advantage of trading using opposite SSC Security and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Security 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 SSC Security Services 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.