Correlation Between Brinker International and Brinks
Can any of the company-specific risk be diversified away by investing in both Brinker International 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 Brinker International and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinker International and The Brinks, you can compare the effects of market volatilities on Brinker International 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 Brinker International with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinker International and Brinks.
Diversification Opportunities for Brinker International and Brinks
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brinker and Brinks is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Brinker International and The Brinks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks and Brinker International 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 Brinker International 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 Brinker International i.e., Brinker International and Brinks go up and down completely randomly.
Pair Corralation between Brinker International and Brinks
Assuming the 90 days horizon Brinker International is expected to generate 1.92 times more return on investment than Brinks. However, Brinker International is 1.92 times more volatile than The Brinks. It trades about 0.12 of its potential returns per unit of risk. The Brinks is currently generating about -0.09 per unit of risk. If you would invest 12,400 in Brinker International on September 29, 2024 and sell it today you would earn a total of 800.00 from holding Brinker International or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Brinker International vs. The Brinks
Performance |
| Timeline |
| Brinker International |
| Brinks |
Brinker International and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinker International and Brinks
The main advantage of trading using opposite Brinker International and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker International 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.| Brinker International vs. McDonalds | Brinker International vs. Starbucks | Brinker International vs. Starbucks | Brinker International vs. Yum Brands |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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