Correlation Between Brinks and MSA Safety
Can any of the company-specific risk be diversified away by investing in both Brinks and MSA Safety 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 MSA Safety into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Brinks and MSA Safety Incorporated, you can compare the effects of market volatilities on Brinks and MSA Safety 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 MSA Safety. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinks and MSA Safety.
Diversification Opportunities for Brinks and MSA Safety
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brinks and MSA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding The Brinks and MSA Safety Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSA Safety 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 The Brinks are associated (or correlated) with MSA Safety. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSA Safety has no effect on the direction of Brinks i.e., Brinks and MSA Safety go up and down completely randomly.
Pair Corralation between Brinks and MSA Safety
Assuming the 90 days horizon The Brinks is expected to generate 1.17 times more return on investment than MSA Safety. However, Brinks is 1.17 times more volatile than MSA Safety Incorporated. It trades about -0.06 of its potential returns per unit of risk. MSA Safety Incorporated is currently generating about -0.36 per unit of risk. 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 |
The Brinks vs. MSA Safety Incorporated
Performance |
| Timeline |
| Brinks |
| MSA Safety |
Brinks and MSA Safety Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinks and MSA Safety
The main advantage of trading using opposite Brinks and MSA Safety positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinks position performs unexpectedly, MSA Safety 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 MSA Safety will offset losses from the drop in MSA Safety's long position.| Brinks vs. American Homes 4 | Brinks vs. Columbia Sportswear | Brinks vs. Air Transport Services | Brinks vs. CENTURIA OFFICE REIT |
| MSA Safety vs. Take Two Interactive Software | MSA Safety vs. VITEC SOFTWARE GROUP | MSA Safety vs. Cars Inc | MSA Safety vs. Guangdong Investment Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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