Correlation Between Universal Security and Brinks

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

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

Diversification Opportunities for Universal Security and Brinks

0.55

Correlation Coefficient

Universal Security  Brinks

Very weak diversification

The 3 months correlation between Universal and Brinks is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Universal Security Instruments and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and Universal Security 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 Universal Security Instruments 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 Universal Security i.e., Universal Security and Brinks go up and down completely randomly.

Pair Corralation between Universal Security and Brinks

Considering the 90-day investment horizon Universal Security Instruments is expected to under-perform the Brinks. In addition to that, Universal Security is 1.29 times more volatile than Brinks Company. It trades about -0.14 of its total potential returns per unit of risk. Brinks Company is currently generating about -0.04 per unit of volatility. If you would invest  9,005  in Brinks Company on December 21, 2024 and sell it today you would lose (424.00) from holding Brinks Company or give up 4.71% of portfolio value over 90 days.

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

Universal Security Instruments  vs.  Brinks Company

Universal Security

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal Security Instruments 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with Universal Security and Brinks

The main advantage of trading using opposite Universal Security and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Security 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 Universal Security Instruments 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.