Correlation Between BIO Key and Sun Hung
Can any of the company-specific risk be diversified away by investing in both BIO Key and Sun Hung 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 Sun Hung 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 Sun Hung Kai, you can compare the effects of market volatilities on BIO Key and Sun Hung 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 Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO Key and Sun Hung.
Diversification Opportunities for BIO Key and Sun Hung
Excellent diversification
The 3 months correlation between BIO and Sun is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai 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 Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of BIO Key i.e., BIO Key and Sun Hung go up and down completely randomly.
Pair Corralation between BIO Key and Sun Hung
Given the investment horizon of 90 days BIO Key International is expected to under-perform the Sun Hung. In addition to that, BIO Key is 6.55 times more volatile than Sun Hung Kai. It trades about -0.01 of its total potential returns per unit of risk. Sun Hung Kai is currently generating about -0.04 per unit of volatility. If you would invest 1,255 in Sun Hung Kai on November 2, 2024 and sell it today you would lose (357.00) from holding Sun Hung Kai or give up 28.45% 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. Sun Hung Kai
Performance |
| Timeline |
| BIO Key International |
| Sun Hung Kai |
BIO Key and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO Key and Sun Hung
The main advantage of trading using opposite BIO Key and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO Key position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung's long position.| BIO Key vs. LogicMark | BIO Key vs. SSC Security Services | BIO Key vs. ICTS International NV | BIO Key vs. Senstar Technologies |
| Sun Hung vs. Hong Kong Land | Sun Hung vs. Wharf Holdings | Sun Hung vs. Holiday Island Holdings | Sun Hung vs. Bayport International Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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