Correlation Between Brinks and Bridger Aerospace
Can any of the company-specific risk be diversified away by investing in both Brinks and Bridger Aerospace 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 Bridger Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinks Company and Bridger Aerospace Group, you can compare the effects of market volatilities on Brinks and Bridger Aerospace 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 Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinks and Bridger Aerospace.
Diversification Opportunities for Brinks and Bridger Aerospace
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brinks and Bridger is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace 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 Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of Brinks i.e., Brinks and Bridger Aerospace go up and down completely randomly.
Pair Corralation between Brinks and Bridger Aerospace
Considering the 90-day investment horizon Brinks is expected to generate 32.67 times less return on investment than Bridger Aerospace. But when comparing it to its historical volatility, Brinks Company is 6.13 times less risky than Bridger Aerospace. It trades about 0.04 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 202.00 in Bridger Aerospace Group on November 3, 2024 and sell it today you would earn a total of 79.00 from holding Bridger Aerospace Group or generate 39.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinks Company vs. Bridger Aerospace Group
Performance |
| Timeline |
| Brinks Company |
| Bridger Aerospace |
Brinks and Bridger Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinks and Bridger Aerospace
The main advantage of trading using opposite Brinks and Bridger Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinks position performs unexpectedly, Bridger Aerospace 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 Bridger Aerospace will offset losses from the drop in Bridger Aerospace's long position.| Brinks vs. MSA Safety | Brinks vs. Resideo Technologies | Brinks vs. Mistras Group | Brinks vs. NL Industries |
| Bridger Aerospace vs. Allegion PLC | Bridger Aerospace vs. MSA Safety | Bridger Aerospace vs. Resideo Technologies | Bridger Aerospace vs. NL Industries |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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