Correlation Between BlackBerry and Brinks

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

By analyzing existing cross correlation between BlackBerry and Brinks Co 4625, you can compare the effects of market volatilities on BlackBerry and Brinks 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 BlackBerry with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackBerry and Brinks.

Diversification Opportunities for BlackBerry and Brinks

-0.43

Correlation Coefficient

BlackBerry  Brinks

Very good diversification

The 3 months correlation between BlackBerry and Brinks is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BlackBerry and Brinks Co 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Co 4625 and BlackBerry 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 BlackBerry are associated (or correlated) with Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks Co 4625 has no effect on the direction of BlackBerry i.e., BlackBerry and Brinks go up and down completely randomly.

Pair Corralation between BlackBerry and Brinks

Allowing for the 90-day total investment horizon BlackBerry is expected to generate 5.1 times more return on investment than Brinks. However, BlackBerry is 5.1 times more volatile than Brinks Co 4625. It trades about 0.04 of its potential returns per unit of risk. Brinks Co 4625 is currently generating about -0.02 per unit of risk. If you would invest  343.00  in BlackBerry on October 26, 2024 and sell it today you would earn a total of  71.50  from holding BlackBerry or generate 20.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.39%
Values	Daily Returns

BlackBerry  vs.  Brinks Co 4625

BlackBerry

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackBerry are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, BlackBerry sustained solid returns over the last few months and may actually be approaching a breakup point.

Brinks Co 4625

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brinks Co 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brinks is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BlackBerry and Brinks

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

The idea behind BlackBerry and Brinks Co 4625 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.