Correlation Between BIO Key and Guardforce
Can any of the company-specific risk be diversified away by investing in both BIO Key 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 BIO Key and Guardforce 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 Guardforce AI Co, you can compare the effects of market volatilities on BIO Key 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 BIO Key with a short position of Guardforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO Key and Guardforce.
Diversification Opportunities for BIO Key and Guardforce
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIO and Guardforce is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI 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 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 BIO Key i.e., BIO Key and Guardforce go up and down completely randomly.
Pair Corralation between BIO Key and Guardforce
Given the investment horizon of 90 days BIO Key International is expected to under-perform the Guardforce. But the stock apears to be less risky and, when comparing its historical volatility, BIO Key International is 1.41 times less risky than Guardforce. The stock trades about -0.51 of its potential returns per unit of risk. The Guardforce AI Co is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 160.00 in Guardforce AI Co on November 29, 2024 and sell it today you would lose (41.00) from holding Guardforce AI Co or give up 25.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BIO Key International vs. Guardforce AI Co
Performance |
| Timeline |
| BIO Key International |
| Guardforce AI |
BIO Key and Guardforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO Key and Guardforce
The main advantage of trading using opposite BIO Key and Guardforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO Key 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.| BIO Key vs. LogicMark | BIO Key vs. SSC Security Services | BIO Key vs. ICTS International NV | BIO Key vs. Senstar Technologies |
| Guardforce vs. Iveda Solutions | Guardforce vs. Bridger Aerospace Group | Guardforce vs. Supercom | Guardforce vs. Guardforce AI Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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