Correlation Between Cemtrex and BIO Key

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

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

Diversification Opportunities for Cemtrex and BIO Key

0.04

Correlation Coefficient

Cemtrex  BIO Key

Significant diversification

The 3 months correlation between Cemtrex and BIO is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex 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 Cemtrex 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 Cemtrex 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 Cemtrex i.e., Cemtrex and BIO Key go up and down completely randomly.

Pair Corralation between Cemtrex and BIO Key

Given the investment horizon of 90 days Cemtrex is expected to under-perform the BIO Key. In addition to that, Cemtrex is 2.76 times more volatile than BIO Key International. It trades about -0.11 of its total potential returns per unit of risk. BIO Key International is currently generating about -0.16 per unit of volatility. If you would invest  80.00  in BIO Key International on May 5, 2025 and sell it today you would lose (4.00) from holding BIO Key International or give up 5.0% of portfolio value over 90 days.

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

Cemtrex  vs.  BIO Key International

Cemtrex

Risk-Adjusted Performance

Weak

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

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.

Pair Trading with Cemtrex and BIO Key

The main advantage of trading using opposite Cemtrex and BIO Key positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtrex 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.

The idea behind Cemtrex and BIO Key International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.