Correlation Between Harfang Exploration and Guardforce

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Can any of the company-specific risk be diversified away by investing in both Harfang Exploration 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 Harfang Exploration and Guardforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harfang Exploration and Guardforce AI Co, you can compare the effects of market volatilities on Harfang Exploration 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 Harfang Exploration with a short position of Guardforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harfang Exploration and Guardforce.

Diversification Opportunities for Harfang Exploration and Guardforce

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Harfang and Guardforce is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Harfang Exploration and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and Harfang Exploration 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 Harfang Exploration 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 Harfang Exploration i.e., Harfang Exploration and Guardforce go up and down completely randomly.

Pair Corralation between Harfang Exploration and Guardforce

Assuming the 90 days horizon Harfang Exploration is expected to generate 1.5 times more return on investment than Guardforce. However, Harfang Exploration is 1.5 times more volatile than Guardforce AI Co. It trades about 0.21 of its potential returns per unit of risk. Guardforce AI Co is currently generating about -0.29 per unit of risk. If you would invest  4.54  in Harfang Exploration on September 12, 2024 and sell it today you would earn a total of  1.46  from holding Harfang Exploration or generate 32.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Harfang Exploration  vs.  Guardforce AI Co

 Performance 
       Timeline  
Harfang Exploration 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Harfang Exploration are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Harfang Exploration reported solid returns over the last few months and may actually be approaching a breakup point.
Guardforce AI 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Guardforce reported solid returns over the last few months and may actually be approaching a breakup point.

Harfang Exploration and Guardforce Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Harfang Exploration and Guardforce

The main advantage of trading using opposite Harfang Exploration and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harfang Exploration 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 Harfang Exploration 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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