Correlation Between Brinks and Senstar Technologies
Can any of the company-specific risk be diversified away by investing in both Brinks and Senstar Technologies 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 Senstar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinks Company and Senstar Technologies, you can compare the effects of market volatilities on Brinks and Senstar Technologies 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 Senstar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinks and Senstar Technologies.
Diversification Opportunities for Brinks and Senstar Technologies
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brinks and Senstar is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and Senstar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senstar Technologies 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 Senstar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senstar Technologies has no effect on the direction of Brinks i.e., Brinks and Senstar Technologies go up and down completely randomly.
Pair Corralation between Brinks and Senstar Technologies
Considering the 90-day investment horizon Brinks Company is expected to under-perform the Senstar Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Brinks Company is 2.7 times less risky than Senstar Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The Senstar Technologies is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Senstar Technologies on September 2, 2024 and sell it today you would earn a total of 173.00 from holding Senstar Technologies or generate 121.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinks Company vs. Senstar Technologies
Performance |
| Timeline |
| Brinks Company |
| Senstar Technologies |
Brinks and Senstar Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinks and Senstar Technologies
The main advantage of trading using opposite Brinks and Senstar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinks position performs unexpectedly, Senstar Technologies 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 Senstar Technologies will offset losses from the drop in Senstar Technologies' long position.| Brinks vs. MSA Safety | Brinks vs. Resideo Technologies | Brinks vs. Mistras Group | Brinks 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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