Correlation Between MSA Safety and Brinks
Can any of the company-specific risk be diversified away by investing in both MSA Safety 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 MSA Safety and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSA Safety Incorporated and The Brinks, you can compare the effects of market volatilities on MSA Safety 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 MSA Safety with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and Brinks.
Diversification Opportunities for MSA Safety and Brinks
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSA and Brinks is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety Incorporated and The Brinks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks and MSA Safety 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 MSA Safety Incorporated 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 MSA Safety i.e., MSA Safety and Brinks go up and down completely randomly.
Pair Corralation between MSA Safety and Brinks
Assuming the 90 days horizon MSA Safety Incorporated is expected to under-perform the Brinks. But the stock apears to be less risky and, when comparing its historical volatility, MSA Safety Incorporated is 1.17 times less risky than Brinks. The stock trades about -0.36 of its potential returns per unit of risk. The The Brinks is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 8,900 in The Brinks on October 16, 2024 and sell it today you would lose (150.00) from holding The Brinks or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSA Safety Incorporated vs. The Brinks
Performance |
| Timeline |
| MSA Safety |
| Brinks |
MSA Safety and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSA Safety and Brinks
The main advantage of trading using opposite MSA Safety and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSA Safety 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.| MSA Safety vs. Take Two Interactive Software | MSA Safety vs. VITEC SOFTWARE GROUP | MSA Safety vs. Cars Inc | MSA Safety vs. Guangdong Investment Limited |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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