Correlation Between Brinks and Bitcoin Depot

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

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

Diversification Opportunities for Brinks and Bitcoin Depot

0.21

Correlation Coefficient

Brinks  Bitcoin Depot

Modest diversification

The 3 months correlation between Brinks and Bitcoin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Brinks i.e., Brinks and Bitcoin Depot go up and down completely randomly.

Pair Corralation between Brinks and Bitcoin Depot

Considering the 90-day investment horizon Brinks Company is expected to under-perform the Bitcoin Depot. But the stock apears to be less risky and, when comparing its historical volatility, Brinks Company is 2.19 times less risky than Bitcoin Depot. The stock trades about -0.03 of its potential returns per unit of risk. The Bitcoin Depot is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Bitcoin Depot on December 28, 2024 and sell it today you would lose (6.00) from holding Bitcoin Depot or give up 3.9% of portfolio value over 90 days.

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

Brinks Company  vs.  Bitcoin Depot

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.

Bitcoin Depot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bitcoin Depot is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Brinks and Bitcoin Depot

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

The idea behind Brinks Company and Bitcoin Depot 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.