Correlation Between SSC Security and Brinks
Can any of the company-specific risk be diversified away by investing in both SSC Security 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 SSC Security and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSC Security Services and Brinks Company, you can compare the effects of market volatilities on SSC Security 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 SSC Security with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Security and Brinks.
Diversification Opportunities for SSC Security and Brinks
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SSC and Brinks is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SSC Security Services and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and SSC Security 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 SSC Security Services 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 SSC Security i.e., SSC Security and Brinks go up and down completely randomly.
Pair Corralation between SSC Security and Brinks
Assuming the 90 days horizon SSC Security Services is expected to generate 3.87 times more return on investment than Brinks. However, SSC Security is 3.87 times more volatile than Brinks Company. It trades about 0.03 of its potential returns per unit of risk. Brinks Company is currently generating about -0.02 per unit of risk. If you would invest 193.00 in SSC Security Services on September 2, 2024 and sell it today you would earn a total of 1.00 from holding SSC Security Services or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSC Security Services vs. Brinks Company
Performance |
| Timeline |
| SSC Security Services |
| Brinks Company |
SSC Security and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSC Security and Brinks
The main advantage of trading using opposite SSC Security and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Security 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.| SSC Security vs. Allegion PLC | SSC Security vs. MSA Safety | SSC Security vs. HUMANA INC | SSC Security vs. Aquagold International |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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