Correlation Between Brinks and SSC Security

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

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

Diversification Opportunities for Brinks and SSC Security

0.02

Correlation Coefficient

Brinks  SSC Security

Significant diversification

The 3 months correlation between Brinks and SSC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and SSC Security Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Security Services 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 SSC Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Security Services has no effect on the direction of Brinks i.e., Brinks and SSC Security go up and down completely randomly.

Pair Corralation between Brinks and SSC Security

Considering the 90-day investment horizon Brinks Company is expected to generate 1.05 times more return on investment than SSC Security. However, Brinks is 1.05 times more volatile than SSC Security Services. It trades about 0.17 of its potential returns per unit of risk. SSC Security Services is currently generating about -0.08 per unit of risk. If you would invest  8,925  in Brinks Company on October 20, 2024 and sell it today you would earn a total of  341.00  from holding Brinks Company or generate 3.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Brinks Company  vs.  SSC Security Services

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.

SSC Security Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brinks and SSC Security

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

The idea behind Brinks Company and SSC Security Services 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.