Correlation Between Air Transport and Brinks
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and The Brinks, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Brinks.
Diversification Opportunities for Air Transport and Brinks
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Brinks is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and The Brinks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks and Air Transport 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 Air Transport Services 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 has no effect on the direction of Air Transport i.e., Air Transport and Brinks go up and down completely randomly.
Pair Corralation between Air Transport and Brinks
Assuming the 90 days horizon Air Transport is expected to generate 7.94 times less return on investment than Brinks. In addition to that, Air Transport is 1.59 times more volatile than The Brinks. It trades about 0.0 of its total potential returns per unit of risk. The Brinks is currently generating about 0.06 per unit of volatility. If you would invest 5,559 in The Brinks on October 16, 2024 and sell it today you would earn a total of 3,191 from holding The Brinks or generate 57.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. The Brinks
Performance |
| Timeline |
| Air Transport Services |
| Brinks |
Air Transport and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Brinks
The main advantage of trading using opposite Air Transport and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. Iridium Communications | Air Transport vs. MAG SILVER | Air Transport vs. De Grey Mining | Air Transport vs. T Mobile |
| Brinks vs. American Homes 4 | Brinks vs. Columbia Sportswear | Brinks vs. Air Transport Services | Brinks vs. CENTURIA OFFICE REIT |
Check out your portfolio center.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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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