Correlation Between Global Digital and Guardforce
Can any of the company-specific risk be diversified away by investing in both Global Digital 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 Global Digital and Guardforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Digital Soltn and Guardforce AI Co, you can compare the effects of market volatilities on Global Digital 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 Global Digital with a short position of Guardforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Digital and Guardforce.
Diversification Opportunities for Global Digital and Guardforce
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Guardforce is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global Digital Soltn and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and Global Digital 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 Global Digital Soltn 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 Global Digital i.e., Global Digital and Guardforce go up and down completely randomly.
Pair Corralation between Global Digital and Guardforce
Given the investment horizon of 90 days Global Digital Soltn is expected to generate 14.79 times more return on investment than Guardforce. However, Global Digital is 14.79 times more volatile than Guardforce AI Co. It trades about 0.08 of its potential returns per unit of risk. Guardforce AI Co is currently generating about -0.04 per unit of risk. If you would invest 0.45 in Global Digital Soltn on September 2, 2024 and sell it today you would lose (0.44) from holding Global Digital Soltn or give up 97.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Global Digital Soltn vs. Guardforce AI Co
Performance |
| Timeline |
| Global Digital Soltn |
| Guardforce AI |
Global Digital and Guardforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Digital and Guardforce
The main advantage of trading using opposite Global Digital and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Digital 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.| Global Digital vs. Seychelle Environmtl | Global Digital vs. Energy and Water | Global Digital vs. One World Universe | Global Digital vs. Vow ASA |
| Guardforce vs. Iveda Solutions | Guardforce vs. Bridger Aerospace Group | Guardforce vs. Supercom | Guardforce vs. Guardforce AI Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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