Correlation Between Bridger Aerospace and CoreCivic

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

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

Diversification Opportunities for Bridger Aerospace and CoreCivic

0.11

Correlation Coefficient

Bridger Aerospace  CoreCivic

Average diversification

The 3 months correlation between Bridger and CoreCivic is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and Bridger Aerospace 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 Bridger Aerospace Group 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 Bridger Aerospace i.e., Bridger Aerospace and CoreCivic go up and down completely randomly.

Pair Corralation between Bridger Aerospace and CoreCivic

Assuming the 90 days horizon Bridger Aerospace Group is expected to generate 15.81 times more return on investment than CoreCivic. However, Bridger Aerospace is 15.81 times more volatile than CoreCivic. It trades about 0.38 of its potential returns per unit of risk. CoreCivic is currently generating about 0.26 per unit of risk. If you would invest  5.10  in Bridger Aerospace Group on October 22, 2024 and sell it today you would earn a total of  15.90  from holding Bridger Aerospace Group or generate 311.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bridger Aerospace Group  vs.  CoreCivic

Bridger Aerospace

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

CoreCivic

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCivic are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, CoreCivic showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bridger Aerospace and CoreCivic

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

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.