Correlation Between Supercom and Brinks
Can any of the company-specific risk be diversified away by investing in both Supercom 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 Supercom and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and Brinks Company, you can compare the effects of market volatilities on Supercom 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 Supercom with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Brinks.
Diversification Opportunities for Supercom and Brinks
Good diversification
The 3 months correlation between Supercom and Brinks is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and Supercom 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 Supercom 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 Supercom i.e., Supercom and Brinks go up and down completely randomly.
Pair Corralation between Supercom and Brinks
Given the investment horizon of 90 days Supercom is expected to generate 2.62 times more return on investment than Brinks. However, Supercom is 2.62 times more volatile than Brinks Company. It trades about 0.11 of its potential returns per unit of risk. Brinks Company is currently generating about -0.12 per unit of risk. If you would invest 340.00 in Supercom on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Supercom or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. Brinks Company
Performance |
| Timeline |
| Supercom |
| Brinks Company |
Supercom and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and Brinks
The main advantage of trading using opposite Supercom and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom 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.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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