Correlation Between BIO Key and Senstar Technologies

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

Diversification Opportunities for BIO Key and Senstar Technologies

0.11

Correlation Coefficient

BIO Key  Senstar Technologies

Average diversification

The 3 months correlation between BIO and Senstar is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding BIO Key International and Senstar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senstar Technologies 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 Senstar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senstar Technologies has no effect on the direction of BIO Key i.e., BIO Key and Senstar Technologies go up and down completely randomly.

Pair Corralation between BIO Key and Senstar Technologies

Given the investment horizon of 90 days BIO Key International is expected to under-perform the Senstar Technologies. But the stock apears to be less risky and, when comparing its historical volatility, BIO Key International is 1.4 times less risky than Senstar Technologies. The stock trades about -0.09 of its potential returns per unit of risk. The Senstar Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  345.00  in Senstar Technologies on May 5, 2025 and sell it today you would earn a total of  82.00  from holding Senstar Technologies or generate 23.77% return on investment over 90 days.

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

BIO Key International  vs.  Senstar Technologies

BIO Key International

Risk-Adjusted Performance

Very Weak

Over the last 90 days BIO Key International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Senstar Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Senstar Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Senstar Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BIO Key and Senstar Technologies

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

The idea behind BIO Key International and Senstar 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.