Correlation Between Brinks and Powell Industries
Can any of the company-specific risk be diversified away by investing in both Brinks and Powell Industries 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 Powell Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinks Company and Powell Industries, you can compare the effects of market volatilities on Brinks and Powell Industries 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 Powell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinks and Powell Industries.
Diversification Opportunities for Brinks and Powell Industries
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brinks and Powell is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and Powell Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powell Industries 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 Brinks Company are associated (or correlated) with Powell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powell Industries has no effect on the direction of Brinks i.e., Brinks and Powell Industries go up and down completely randomly.
Pair Corralation between Brinks and Powell Industries
Considering the 90-day investment horizon Brinks is expected to generate 10.39 times less return on investment than Powell Industries. But when comparing it to its historical volatility, Brinks Company is 2.15 times less risky than Powell Industries. It trades about 0.02 of its potential returns per unit of risk. Powell Industries is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 27,217 in Powell Industries on September 6, 2025 and sell it today you would earn a total of 6,476 from holding Powell Industries or generate 23.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinks Company vs. Powell Industries
Performance |
| Timeline |
| Brinks Company |
| Powell Industries |
Brinks and Powell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinks and Powell Industries
The main advantage of trading using opposite Brinks and Powell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinks position performs unexpectedly, Powell Industries 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 Powell Industries will offset losses from the drop in Powell Industries' long position.| Brinks vs. JD Sports Fashion | Brinks vs. Paiute Oil Mining | Brinks vs. Triumph Apparel | Brinks vs. G III Apparel Group |
| Powell Industries vs. Richardson Electronics | Powell Industries vs. Kid Castle Educational | Powell Industries vs. The Dewey Electronics | Powell Industries vs. China Education Resources |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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