Correlation Between CoreCivic and Brady
Can any of the company-specific risk be diversified away by investing in both CoreCivic and Brady 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 CoreCivic and Brady into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoreCivic and Brady, you can compare the effects of market volatilities on CoreCivic and Brady 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 CoreCivic with a short position of Brady. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreCivic and Brady.
Diversification Opportunities for CoreCivic and Brady
Average diversification
The 3 months correlation between CoreCivic and Brady is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and Brady in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brady and CoreCivic 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 CoreCivic are associated (or correlated) with Brady. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brady has no effect on the direction of CoreCivic i.e., CoreCivic and Brady go up and down completely randomly.
Pair Corralation between CoreCivic and Brady
Considering the 90-day investment horizon CoreCivic is expected to generate 4.14 times more return on investment than Brady. However, CoreCivic is 4.14 times more volatile than Brady. It trades about 0.33 of its potential returns per unit of risk. Brady is currently generating about 0.12 per unit of risk. If you would invest 1,331 in CoreCivic on September 2, 2024 and sell it today you would earn a total of 902.00 from holding CoreCivic or generate 67.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CoreCivic vs. Brady
Performance |
| Timeline |
| CoreCivic |
| Brady |
CoreCivic and Brady Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CoreCivic and Brady
The main advantage of trading using opposite CoreCivic and Brady positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoreCivic position performs unexpectedly, Brady 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 Brady will offset losses from the drop in Brady's long position.| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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