Correlation Between BIO Key and Bayport International
Can any of the company-specific risk be diversified away by investing in both BIO Key and Bayport International 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 BIO Key and Bayport International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIO Key International and Bayport International Holdings, you can compare the effects of market volatilities on BIO Key and Bayport International 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 BIO Key with a short position of Bayport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO Key and Bayport International.
Diversification Opportunities for BIO Key and Bayport International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BIO and Bayport is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Bayport International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayport International and BIO Key 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 BIO Key International are associated (or correlated) with Bayport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayport International has no effect on the direction of BIO Key i.e., BIO Key and Bayport International go up and down completely randomly.
Pair Corralation between BIO Key and Bayport International
Given the investment horizon of 90 days BIO Key International is expected to under-perform the Bayport International. But the stock apears to be less risky and, when comparing its historical volatility, BIO Key International is 7.66 times less risky than Bayport International. The stock trades about -0.01 of its potential returns per unit of risk. The Bayport International Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Bayport International Holdings on November 2, 2024 and sell it today you would lose (0.79) from holding Bayport International Holdings or give up 98.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIO Key International vs. Bayport International Holdings
Performance |
| Timeline |
| BIO Key International |
| Bayport International |
BIO Key and Bayport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO Key and Bayport International
The main advantage of trading using opposite BIO Key and Bayport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO Key position performs unexpectedly, Bayport International 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 Bayport International will offset losses from the drop in Bayport International's long position.| BIO Key vs. LogicMark | BIO Key vs. SSC Security Services | BIO Key vs. ICTS International NV | BIO Key vs. Senstar Technologies |
| Bayport International vs. Hong Kong Land | Bayport International vs. Wharf Holdings | Bayport International vs. Holiday Island Holdings | Bayport International vs. Sun Hung Kai |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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