Correlation Between Risk George and Brinks

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

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

Diversification Opportunities for Risk George and Brinks

-0.84

Correlation Coefficient

Risk George  Brinks

Pay attention - limited upside

The 3 months correlation between Risk and Brinks is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Risk George Inds and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and Risk George 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 Risk George Inds are associated (or correlated) with Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks Company has no effect on the direction of Risk George i.e., Risk George and Brinks go up and down completely randomly.

Pair Corralation between Risk George and Brinks

Assuming the 90 days horizon Risk George Inds is expected to generate 1.12 times more return on investment than Brinks. However, Risk George is 1.12 times more volatile than Brinks Company. It trades about 0.12 of its potential returns per unit of risk. Brinks Company is currently generating about -0.19 per unit of risk. If you would invest  1,493  in Risk George Inds on September 26, 2024 and sell it today you would earn a total of  207.00  from holding Risk George Inds or generate 13.86% return on investment over 90 days.

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

Risk George Inds  vs.  Brinks Company

Risk George Inds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Risk George Inds are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Risk George sustained solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Risk George and Brinks

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

The idea behind Risk George Inds and Brinks Company 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..