Correlation Between Aterian and CoreCivic

Can any of the company-specific risk be diversified away by investing in both Aterian 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 Aterian and CoreCivic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aterian and CoreCivic 475 percent, you can compare the effects of market volatilities on Aterian 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 Aterian with a short position of CoreCivic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aterian and CoreCivic.

Diversification Opportunities for Aterian and CoreCivic

-0.29

Correlation Coefficient

Aterian  CoreCivic

Very good diversification

The 3 months correlation between Aterian and CoreCivic is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and CoreCivic 475 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic 475 percent and Aterian 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 Aterian 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 475 percent has no effect on the direction of Aterian i.e., Aterian and CoreCivic go up and down completely randomly.

Pair Corralation between Aterian and CoreCivic

Given the investment horizon of 90 days Aterian is expected to generate 3.08 times more return on investment than CoreCivic. However, Aterian is 3.08 times more volatile than CoreCivic 475 percent. It trades about 0.02 of its potential returns per unit of risk. CoreCivic 475 percent is currently generating about -0.04 per unit of risk. If you would invest  261.00  in Aterian on October 7, 2024 and sell it today you would lose (3.00) from holding Aterian or give up 1.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Aterian  vs.  CoreCivic 475 percent

Aterian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aterian has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Aterian is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

CoreCivic 475 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoreCivic 475 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CoreCivic 475 percent investors.

Pair Trading with Aterian and CoreCivic

The main advantage of trading using opposite Aterian and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian 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.

The idea behind Aterian and CoreCivic 475 percent pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.