Correlation Between Mistras and Brinks
Can any of the company-specific risk be diversified away by investing in both Mistras 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 Mistras and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mistras Group and Brinks Company, you can compare the effects of market volatilities on Mistras 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 Mistras with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mistras and Brinks.
Diversification Opportunities for Mistras and Brinks
Poor diversification
The 3 months correlation between Mistras and Brinks is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mistras Group and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and Mistras 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 Mistras Group 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 Company has no effect on the direction of Mistras i.e., Mistras and Brinks go up and down completely randomly.
Pair Corralation between Mistras and Brinks
Allowing for the 90-day total investment horizon Mistras Group is expected to under-perform the Brinks. In addition to that, Mistras is 3.91 times more volatile than Brinks Company. It trades about -0.12 of its total potential returns per unit of risk. Brinks Company is currently generating about -0.24 per unit of volatility. If you would invest 10,417 in Brinks Company on August 27, 2024 and sell it today you would lose (762.00) from holding Brinks Company or give up 7.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mistras Group vs. Brinks Company
Performance |
| Timeline |
| Mistras Group |
| Brinks Company |
Mistras and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mistras and Brinks
The main advantage of trading using opposite Mistras and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mistras 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.| Mistras vs. Franklin Covey | Mistras vs. TransUnion | Mistras vs. ICF International | Mistras vs. Huron Consulting Group |
| Brinks vs. Park Electrochemical | Brinks vs. Innovative Solutions and | Brinks vs. Curtiss Wright | Brinks vs. National Presto 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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