Correlation Between IGO and Guardforce
Can any of the company-specific risk be diversified away by investing in both IGO 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 IGO and Guardforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Guardforce AI Co, you can compare the effects of market volatilities on IGO 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 IGO with a short position of Guardforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Guardforce.
Diversification Opportunities for IGO and Guardforce
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IGO and Guardforce is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI and IGO 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 IGO Limited 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 IGO i.e., IGO and Guardforce go up and down completely randomly.
Pair Corralation between IGO and Guardforce
Assuming the 90 days horizon IGO Limited is expected to under-perform the Guardforce. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 3.16 times less risky than Guardforce. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Guardforce AI Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Guardforce AI Co on September 12, 2024 and sell it today you would lose (11.66) from holding Guardforce AI Co or give up 77.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. Guardforce AI Co
Performance |
| Timeline |
| IGO Limited |
| Guardforce AI |
IGO and Guardforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Guardforce
The main advantage of trading using opposite IGO and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO 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.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Guardforce vs. Qubec Nickel Corp | Guardforce vs. IGO Limited | Guardforce vs. Focus Graphite | Guardforce vs. Mineral Res |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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