Correlation Between ATT and Guardforce

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

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

Diversification Opportunities for ATT and Guardforce

-0.67

Correlation Coefficient

ATT  Guardforce

Excellent diversification

The 3 months correlation between ATT and Guardforce is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and ATT 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 ATT Inc 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 ATT i.e., ATT and Guardforce go up and down completely randomly.

Pair Corralation between ATT and Guardforce

Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.14 times more return on investment than Guardforce. However, ATT Inc is 7.15 times less risky than Guardforce. 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  2,232  in ATT Inc on December 28, 2024 and sell it today you would earn a total of  588.00  from holding ATT Inc or generate 26.34% return on investment over 90 days.

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

ATT Inc  vs.  Guardforce AI Co

ATT Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ATT Inc are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ATT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Guardforce AI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guardforce AI Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Guardforce is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ATT and Guardforce

The main advantage of trading using opposite ATT and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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 ATT Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.