Correlation Between VCI Global and CoreCivic
Can any of the company-specific risk be diversified away by investing in both VCI Global 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 VCI Global and CoreCivic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VCI Global Limited and CoreCivic, you can compare the effects of market volatilities on VCI Global 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 VCI Global with a short position of CoreCivic. Check out your portfolio center. Please also check ongoing floating volatility patterns of VCI Global and CoreCivic.
Diversification Opportunities for VCI Global and CoreCivic
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VCI and CoreCivic is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and VCI Global 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 VCI Global Limited 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 VCI Global i.e., VCI Global and CoreCivic go up and down completely randomly.
Pair Corralation between VCI Global and CoreCivic
Given the investment horizon of 90 days VCI Global Limited is expected to generate 9.93 times more return on investment than CoreCivic. However, VCI Global is 9.93 times more volatile than CoreCivic. It trades about 0.02 of its potential returns per unit of risk. CoreCivic is currently generating about 0.07 per unit of risk. If you would invest 20,824 in VCI Global Limited on October 20, 2024 and sell it today you would lose (20,694) from holding VCI Global Limited or give up 99.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 89.7% |
| Values | Daily Returns |
VCI Global Limited vs. CoreCivic
Performance |
| Timeline |
| VCI Global Limited |
| CoreCivic |
VCI Global and CoreCivic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VCI Global and CoreCivic
The main advantage of trading using opposite VCI Global and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VCI Global 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.| VCI Global vs. CRA International | VCI Global vs. ICF International | VCI Global vs. Forrester Research | VCI Global vs. Huron Consulting 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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