Correlation Between CompX International and Brinks

Can any of the company-specific risk be diversified away by investing in both CompX International 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 CompX International and Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CompX International and Brinks Company, you can compare the effects of market volatilities on CompX International 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 CompX International with a short position of Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompX International and Brinks.

Diversification Opportunities for CompX International and Brinks

0.52

Correlation Coefficient

CompX International  Brinks

Very weak diversification

The 3 months correlation between CompX and Brinks is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CompX International and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company and CompX International 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 CompX International 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 CompX International i.e., CompX International and Brinks go up and down completely randomly.

Pair Corralation between CompX International and Brinks

Considering the 90-day investment horizon CompX International is expected to under-perform the Brinks. In addition to that, CompX International is 1.78 times more volatile than Brinks Company. It trades about -0.04 of its total potential returns per unit of risk. Brinks Company is currently generating about 0.05 per unit of volatility. If you would invest  9,067  in Brinks Company on April 24, 2025 and sell it today you would earn a total of  367.00  from holding Brinks Company or generate 4.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CompX International  vs.  Brinks Company

CompX International

Risk-Adjusted Performance

Very Weak

Over the last 90 days CompX International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, CompX International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Brinks Company

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brinks Company are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Brinks is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CompX International and Brinks

The main advantage of trading using opposite CompX International and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompX International 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.

The idea behind CompX International and Brinks Company pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..