Correlation Between Wilhelmina and CoreCivic
Can any of the company-specific risk be diversified away by investing in both Wilhelmina 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 Wilhelmina and CoreCivic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilhelmina and CoreCivic, you can compare the effects of market volatilities on Wilhelmina 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 Wilhelmina with a short position of CoreCivic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilhelmina and CoreCivic.
Diversification Opportunities for Wilhelmina and CoreCivic
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wilhelmina and CoreCivic is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wilhelmina and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and Wilhelmina 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 Wilhelmina 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 Wilhelmina i.e., Wilhelmina and CoreCivic go up and down completely randomly.
Pair Corralation between Wilhelmina and CoreCivic
Given the investment horizon of 90 days Wilhelmina is expected to generate 2.99 times less return on investment than CoreCivic. But when comparing it to its historical volatility, Wilhelmina is 3.0 times less risky than CoreCivic. It trades about 0.27 of its potential returns per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilhelmina vs. CoreCivic
Performance |
| Timeline |
| Wilhelmina |
| CoreCivic |
Wilhelmina and CoreCivic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilhelmina and CoreCivic
The main advantage of trading using opposite Wilhelmina and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilhelmina 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.| Wilhelmina vs. Park Electrochemical | Wilhelmina vs. Innovative Solutions and | Wilhelmina vs. Curtiss Wright | Wilhelmina vs. National Presto 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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