Correlation Between CoreCivic and CompX International
Can any of the company-specific risk be diversified away by investing in both CoreCivic and CompX International 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 CompX International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoreCivic and CompX International, you can compare the effects of market volatilities on CoreCivic and CompX International 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 CompX International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreCivic and CompX International.
Diversification Opportunities for CoreCivic and CompX International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between CoreCivic and CompX is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and CompX International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompX International 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 CompX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompX International has no effect on the direction of CoreCivic i.e., CoreCivic and CompX International go up and down completely randomly.
Pair Corralation between CoreCivic and CompX International
Considering the 90-day investment horizon CoreCivic is expected to under-perform the CompX International. But the stock apears to be less risky and, when comparing its historical volatility, CoreCivic is 1.42 times less risky than CompX International. The stock trades about -0.46 of its potential returns per unit of risk. The CompX International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,427 in CompX International on November 9, 2024 and sell it today you would earn a total of 70.00 from holding CompX International or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CoreCivic vs. CompX International
Performance |
| Timeline |
| CoreCivic |
| CompX International |
CoreCivic and CompX International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CoreCivic and CompX International
The main advantage of trading using opposite CoreCivic and CompX International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoreCivic position performs unexpectedly, CompX International 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 CompX International will offset losses from the drop in CompX International's long position.| CoreCivic vs. ADT Inc | CoreCivic vs. NL Industries | CoreCivic vs. Mistras Group | CoreCivic vs. Evolv Technologies Holdings |
| CompX International vs. NL Industries | CompX International vs. Eastern Co | CompX International vs. CF Financial | CompX International vs. Bar Harbor Bankshares |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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