Correlation Between BIO Key and Vopia
Can any of the company-specific risk be diversified away by investing in both BIO Key and Vopia 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 Vopia 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 Vopia Inc, you can compare the effects of market volatilities on BIO Key and Vopia 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 Vopia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO Key and Vopia.
Diversification Opportunities for BIO Key and Vopia
Modest diversification
The 3 months correlation between BIO and Vopia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Vopia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vopia Inc 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 Vopia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vopia Inc has no effect on the direction of BIO Key i.e., BIO Key and Vopia go up and down completely randomly.
Pair Corralation between BIO Key and Vopia
Given the investment horizon of 90 days BIO Key International is expected to generate 1.12 times more return on investment than Vopia. However, BIO Key is 1.12 times more volatile than Vopia Inc. It trades about 0.03 of its potential returns per unit of risk. Vopia Inc is currently generating about 0.03 per unit of risk. If you would invest 123.00 in BIO Key International on September 2, 2024 and sell it today you would lose (33.00) from holding BIO Key International or give up 26.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIO Key International vs. Vopia Inc
Performance |
| Timeline |
| BIO Key International |
| Vopia Inc |
BIO Key and Vopia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO Key and Vopia
The main advantage of trading using opposite BIO Key and Vopia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO Key position performs unexpectedly, Vopia 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 Vopia will offset losses from the drop in Vopia's long position.| BIO Key vs. LogicMark | BIO Key vs. SSC Security Services | BIO Key vs. ICTS International NV | BIO Key vs. Senstar Technologies |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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