Correlation Between Brinks and Aeries Technology

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

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

Diversification Opportunities for Brinks and Aeries Technology

0.72

Correlation Coefficient

Brinks  Aeries Technology

Poor diversification

The 3 months correlation between Brinks and Aeries is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and Brinks 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 Brinks Company are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of Brinks i.e., Brinks and Aeries Technology go up and down completely randomly.

Pair Corralation between Brinks and Aeries Technology

Considering the 90-day investment horizon Brinks Company is expected to generate 0.12 times more return on investment than Aeries Technology. However, Brinks Company is 8.35 times less risky than Aeries Technology. It trades about -0.15 of its potential returns per unit of risk. Aeries Technology is currently generating about -0.04 per unit of risk. If you would invest  10,395  in Brinks Company on October 6, 2024 and sell it today you would lose (1,074) from holding Brinks Company or give up 10.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

Brinks Company  vs.  Aeries Technology

Brinks Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brinks Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aeries Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brinks and Aeries Technology

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

The idea behind Brinks Company and Aeries Technology 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.