Correlation Between CompX International and BIO Key
Can any of the company-specific risk be diversified away by investing in both CompX International and BIO Key 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 CompX International and BIO Key into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompX International and BIO Key International, you can compare the effects of market volatilities on CompX International and BIO Key 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 CompX International with a short position of BIO Key. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompX International and BIO Key.
Diversification Opportunities for CompX International and BIO Key
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompX and BIO is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CompX International and BIO Key International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO Key International and CompX International 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 CompX International are associated (or correlated) with BIO Key. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO Key International has no effect on the direction of CompX International i.e., CompX International and BIO Key go up and down completely randomly.
Pair Corralation between CompX International and BIO Key
Considering the 90-day investment horizon CompX International is expected to generate 0.33 times more return on investment than BIO Key. However, CompX International is 3.03 times less risky than BIO Key. It trades about 0.07 of its potential returns per unit of risk. BIO Key International is currently generating about 0.0 per unit of risk. If you would invest 2,112 in CompX International on September 2, 2024 and sell it today you would earn a total of 649.00 from holding CompX International or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompX International vs. BIO Key International
Performance |
| Timeline |
| CompX International |
| BIO Key International |
CompX International and BIO Key Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompX International and BIO Key
The main advantage of trading using opposite CompX International and BIO Key positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompX International position performs unexpectedly, BIO Key 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 BIO Key will offset losses from the drop in BIO Key's long position.| CompX International vs. NL Industries | CompX International vs. Eastern Co | CompX International vs. CF Financial | CompX International vs. Bar Harbor Bankshares |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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