Correlation Between Franklin Covey and CoreCivic
Can any of the company-specific risk be diversified away by investing in both Franklin Covey 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 Franklin Covey and CoreCivic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Covey and CoreCivic, you can compare the effects of market volatilities on Franklin Covey 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 Franklin Covey with a short position of CoreCivic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Covey and CoreCivic.
Diversification Opportunities for Franklin Covey and CoreCivic
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Franklin and CoreCivic is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and Franklin Covey 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 Franklin Covey 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 Franklin Covey i.e., Franklin Covey and CoreCivic go up and down completely randomly.
Pair Corralation between Franklin Covey and CoreCivic
Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the CoreCivic. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 2.14 times less risky than CoreCivic. The stock trades about -0.09 of its potential returns per unit of risk. The CoreCivic is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,445 in CoreCivic on August 27, 2024 and sell it today you would earn a total of 756.00 from holding CoreCivic or generate 52.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Covey vs. CoreCivic
Performance |
| Timeline |
| Franklin Covey |
| CoreCivic |
Franklin Covey and CoreCivic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Covey and CoreCivic
The main advantage of trading using opposite Franklin Covey and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey 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.| Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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