Correlation Between Brinks and Viad Corp

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

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

Diversification Opportunities for Brinks and Viad Corp

-0.8

Correlation Coefficient

Brinks  Viad Corp

Pay attention - limited upside

The 3 months correlation between Brinks and Viad is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and Viad Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viad Corp 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 Viad Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viad Corp has no effect on the direction of Brinks i.e., Brinks and Viad Corp go up and down completely randomly.

Pair Corralation between Brinks and Viad Corp

Considering the 90-day investment horizon Brinks Company is expected to under-perform the Viad Corp. But the stock apears to be less risky and, when comparing its historical volatility, Brinks Company is 1.77 times less risky than Viad Corp. The stock trades about -0.22 of its potential returns per unit of risk. The Viad Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  3,856  in Viad Corp on September 5, 2024 and sell it today you would earn a total of  640.00  from holding Viad Corp or generate 16.6% return on investment over 90 days.

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

Brinks Company  vs.  Viad Corp

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 latest fragile performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Viad Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viad Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Viad Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brinks and Viad Corp

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

The idea behind Brinks Company and Viad Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.