Correlation Between BIO Key and Guardforce

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

Diversification Opportunities for BIO Key and Guardforce

0.06

Correlation Coefficient

BIO Key  Guardforce

Significant diversification

The 3 months correlation between BIO and Guardforce is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Guardforce AI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardforce AI 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 Guardforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardforce AI has no effect on the direction of BIO Key i.e., BIO Key and Guardforce go up and down completely randomly.

Pair Corralation between BIO Key and Guardforce

Given the investment horizon of 90 days BIO Key International is expected to generate 2.35 times more return on investment than Guardforce. However, BIO Key is 2.35 times more volatile than Guardforce AI Co. It trades about 0.01 of its potential returns per unit of risk. Guardforce AI Co is currently generating about -0.1 per unit of risk. If you would invest  175.00  in BIO Key International on September 24, 2024 and sell it today you would lose (88.00) from holding BIO Key International or give up 50.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BIO Key International  vs.  Guardforce AI Co

BIO Key International

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BIO Key International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, BIO Key may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Guardforce AI

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guardforce AI Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Guardforce may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BIO Key and Guardforce

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

The idea behind BIO Key International and Guardforce AI Co 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.