Correlation Between Brinks and AMREP

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

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

Diversification Opportunities for Brinks and AMREP

0.79

Correlation Coefficient

Brinks  AMREP

Poor diversification

The 3 months correlation between Brinks and AMREP is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP 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 AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Brinks i.e., Brinks and AMREP go up and down completely randomly.

Pair Corralation between Brinks and AMREP

Considering the 90-day investment horizon Brinks Company is expected to generate 0.54 times more return on investment than AMREP. However, Brinks Company is 1.86 times less risky than AMREP. It trades about -0.04 of its potential returns per unit of risk. AMREP is currently generating about -0.2 per unit of risk. If you would invest  9,168  in Brinks Company on December 29, 2024 and sell it today you would lose (451.00) from holding Brinks Company or give up 4.92% of portfolio value over 90 days.

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

Brinks Company  vs.  AMREP

Brinks Company

Risk-Adjusted Performance

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 very healthy fundamental indicators, Brinks is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

AMREP

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMREP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Brinks and AMREP

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

The idea behind Brinks Company and AMREP 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.