Correlation Between Metalert and BK Technologies

Can any of the company-specific risk be diversified away by investing in both Metalert and BK Technologies 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 Metalert and BK Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Metalert and BK Technologies, you can compare the effects of market volatilities on Metalert and BK Technologies 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 Metalert with a short position of BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalert and BK Technologies.

Diversification Opportunities for Metalert and BK Technologies

0.61

Correlation Coefficient

Metalert  BK Technologies

Poor diversification

The 3 months correlation between Metalert and BKTI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Metalert and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies and Metalert 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 Metalert are associated (or correlated) with BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of Metalert i.e., Metalert and BK Technologies go up and down completely randomly.

Pair Corralation between Metalert and BK Technologies

Given the investment horizon of 90 days Metalert is expected to under-perform the BK Technologies. In addition to that, Metalert is 1.73 times more volatile than BK Technologies. It trades about -0.12 of its total potential returns per unit of risk. BK Technologies is currently generating about 0.03 per unit of volatility. If you would invest  3,491  in BK Technologies on December 28, 2024 and sell it today you would earn a total of  109.00  from holding BK Technologies or generate 3.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Metalert  vs.  BK Technologies

Metalert

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metalert has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BK Technologies

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BK Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, BK Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Metalert and BK Technologies

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

The idea behind Metalert and BK Technologies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.