Correlation Between BIO Key and Vopia

Can any of the company-specific risk be diversified away by investing in both BIO Key and Vopia 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 Vopia 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 Vopia Inc, you can compare the effects of market volatilities on BIO Key and Vopia 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 Vopia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO Key and Vopia.

Diversification Opportunities for BIO Key and Vopia

-0.28

Correlation Coefficient

BIO Key  Vopia

Very good diversification

The 3 months correlation between BIO and Vopia is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Vopia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vopia Inc 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 Vopia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vopia Inc has no effect on the direction of BIO Key i.e., BIO Key and Vopia go up and down completely randomly.

Pair Corralation between BIO Key and Vopia

If you would invest  107.00  in BIO Key International on October 11, 2024 and sell it today you would earn a total of  37.00  from holding BIO Key International or generate 34.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

BIO Key International  vs.  Vopia Inc

BIO Key International

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BIO Key International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, BIO Key demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Vopia Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vopia Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vopia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BIO Key and Vopia

The main advantage of trading using opposite BIO Key and Vopia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO Key position performs unexpectedly, Vopia 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 Vopia will offset losses from the drop in Vopia's long position.

The idea behind BIO Key International and Vopia Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.