Correlation Between BIO Key and Supercom
Can any of the company-specific risk be diversified away by investing in both BIO Key and Supercom 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 Supercom 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 Supercom, you can compare the effects of market volatilities on BIO Key and Supercom 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 Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO Key and Supercom.
Diversification Opportunities for BIO Key and Supercom
Very weak diversification
The 3 months correlation between BIO and Supercom is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom 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 Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of BIO Key i.e., BIO Key and Supercom go up and down completely randomly.
Pair Corralation between BIO Key and Supercom
Given the investment horizon of 90 days BIO Key is expected to generate 1.57 times less return on investment than Supercom. In addition to that, BIO Key is 1.27 times more volatile than Supercom. It trades about 0.23 of its total potential returns per unit of risk. Supercom is currently generating about 0.46 per unit of volatility. If you would invest 344.00 in Supercom on October 23, 2024 and sell it today you would earn a total of 998.00 from holding Supercom or generate 290.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIO Key International vs. Supercom
Performance |
| Timeline |
| BIO Key International |
| Supercom |
BIO Key and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO Key and Supercom
The main advantage of trading using opposite BIO Key and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO Key position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| BIO Key vs. LogicMark | BIO Key vs. SSC Security Services | BIO Key vs. ICTS International NV | BIO Key vs. Senstar Technologies |
| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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