Correlation Between Guardforce and NextPlat Corp
Can any of the company-specific risk be diversified away by investing in both Guardforce and NextPlat Corp 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 Guardforce and NextPlat Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardforce AI Co and NextPlat Corp, you can compare the effects of market volatilities on Guardforce and NextPlat Corp 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 Guardforce with a short position of NextPlat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardforce and NextPlat Corp.
Diversification Opportunities for Guardforce and NextPlat Corp
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guardforce and NextPlat is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guardforce AI Co and NextPlat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextPlat Corp and Guardforce 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 Guardforce AI Co are associated (or correlated) with NextPlat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextPlat Corp has no effect on the direction of Guardforce i.e., Guardforce and NextPlat Corp go up and down completely randomly.
Pair Corralation between Guardforce and NextPlat Corp
Assuming the 90 days horizon Guardforce is expected to generate 8.78 times less return on investment than NextPlat Corp. But when comparing it to its historical volatility, Guardforce AI Co is 1.71 times less risky than NextPlat Corp. It trades about 0.02 of its potential returns per unit of risk. NextPlat Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 20.00 in NextPlat Corp on December 11, 2024 and sell it today you would earn a total of 1.00 from holding NextPlat Corp or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Guardforce AI Co vs. NextPlat Corp
Performance |
| Timeline |
| Guardforce AI |
| NextPlat Corp |
Guardforce and NextPlat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardforce and NextPlat Corp
The main advantage of trading using opposite Guardforce and NextPlat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardforce position performs unexpectedly, NextPlat Corp 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 NextPlat Corp will offset losses from the drop in NextPlat Corp's long position.| Guardforce vs. Bel Fuse A | Guardforce vs. LSI Industries | Guardforce vs. Benchmark Electronics | Guardforce vs. Plexus Corp |
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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