Correlation Between MSA Safety and BIO Key
Can any of the company-specific risk be diversified away by investing in both MSA Safety 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 MSA Safety and BIO Key into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSA Safety and BIO Key International, you can compare the effects of market volatilities on MSA Safety 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 MSA Safety with a short position of BIO Key. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and BIO Key.
Diversification Opportunities for MSA Safety and BIO Key
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between MSA and BIO is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety 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 MSA Safety 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 MSA Safety 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 MSA Safety i.e., MSA Safety and BIO Key go up and down completely randomly.
Pair Corralation between MSA Safety and BIO Key
Considering the 90-day investment horizon MSA Safety is expected to generate 89.5 times less return on investment than BIO Key. But when comparing it to its historical volatility, MSA Safety is 9.88 times less risky than BIO Key. It trades about 0.0 of its potential returns per unit of risk. BIO Key International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 192.00 in BIO Key International on September 2, 2024 and sell it today you would lose (102.00) from holding BIO Key International or give up 53.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSA Safety vs. BIO Key International
Performance |
| Timeline |
| MSA Safety |
| BIO Key International |
MSA Safety and BIO Key Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSA Safety and BIO Key
The main advantage of trading using opposite MSA Safety and BIO Key positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSA Safety 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.| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
| 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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