Correlation Between Brinks and CoreCivic
Can any of the company-specific risk be diversified away by investing in both Brinks and CoreCivic 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 CoreCivic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brinks Company and CoreCivic, you can compare the effects of market volatilities on Brinks and CoreCivic 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 CoreCivic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brinks and CoreCivic.
Diversification Opportunities for Brinks and CoreCivic
Pay attention - limited upside
The 3 months correlation between Brinks and CoreCivic is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Brinks Company and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic 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 CoreCivic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreCivic has no effect on the direction of Brinks i.e., Brinks and CoreCivic go up and down completely randomly.
Pair Corralation between Brinks and CoreCivic
Considering the 90-day investment horizon Brinks is expected to generate 2.09 times less return on investment than CoreCivic. But when comparing it to its historical volatility, Brinks Company is 1.65 times less risky than CoreCivic. It trades about 0.05 of its potential returns per unit of risk. CoreCivic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,038 in CoreCivic on October 20, 2024 and sell it today you would earn a total of 1,267 from holding CoreCivic or generate 122.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brinks Company vs. CoreCivic
Performance |
| Timeline |
| Brinks Company |
| CoreCivic |
Brinks and CoreCivic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brinks and CoreCivic
The main advantage of trading using opposite Brinks and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinks position performs unexpectedly, CoreCivic 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 CoreCivic will offset losses from the drop in CoreCivic's long position.| Brinks vs. MSA Safety | Brinks vs. Resideo Technologies | Brinks vs. Mistras Group | Brinks vs. NL Industries |
| CoreCivic vs. ADT Inc | CoreCivic vs. NL Industries | CoreCivic vs. Mistras Group | CoreCivic vs. Evolv Technologies Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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