Correlation Between BIO Key and Brinks
Can any of the company-specific risk be diversified away by investing in both BIO Key and Brinks 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 Brinks 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 Brinks Company, you can compare the effects of market volatilities on BIO Key and Brinks 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 Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO Key and Brinks.
Diversification Opportunities for BIO Key and Brinks
Significant diversification
The 3 months correlation between BIO and Brinks is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company 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 Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks Company has no effect on the direction of BIO Key i.e., BIO Key and Brinks go up and down completely randomly.
Pair Corralation between BIO Key and Brinks
Given the investment horizon of 90 days BIO Key International is expected to generate 7.59 times more return on investment than Brinks. However, BIO Key is 7.59 times more volatile than Brinks Company. It trades about 0.0 of its potential returns per unit of risk. Brinks Company is currently generating about -0.02 per unit of risk. If you would invest 192.00 in BIO Key International on September 2, 2024 and sell it today you would lose (102.00) from holding BIO Key International or give up 53.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIO Key International vs. Brinks Company
Performance |
| Timeline |
| BIO Key International |
| Brinks Company |
BIO Key and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO Key and Brinks
The main advantage of trading using opposite BIO Key and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO Key position performs unexpectedly, Brinks 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 Brinks will offset losses from the drop in Brinks' long position.| BIO Key vs. LogicMark | BIO Key vs. SSC Security Services | BIO Key vs. ICTS International NV | BIO Key vs. Senstar Technologies |
| Brinks vs. MSA Safety | Brinks vs. Resideo Technologies | Brinks vs. Mistras Group | Brinks vs. NL Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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