Correlation Between Civeo Corp and CoreCivic

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

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

Diversification Opportunities for Civeo Corp and CoreCivic

-0.19

Correlation Coefficient

Civeo Corp  CoreCivic

Good diversification

The 3 months correlation between Civeo and CoreCivic is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Civeo Corp and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and Civeo Corp 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 Civeo Corp 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 Civeo Corp i.e., Civeo Corp and CoreCivic go up and down completely randomly.

Pair Corralation between Civeo Corp and CoreCivic

Given the investment horizon of 90 days Civeo Corp is expected to generate 1.3 times more return on investment than CoreCivic. However, Civeo Corp is 1.3 times more volatile than CoreCivic. It trades about 0.03 of its potential returns per unit of risk. CoreCivic is currently generating about -0.03 per unit of risk. If you would invest  2,231  in Civeo Corp on December 29, 2024 and sell it today you would earn a total of  54.00  from holding Civeo Corp or generate 2.42% return on investment over 90 days.

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

Civeo Corp  vs.  CoreCivic

Civeo Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Civeo Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Civeo Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

CoreCivic

Risk-Adjusted Performance

Very Weak

Over the last 90 days CoreCivic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CoreCivic is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Civeo Corp and CoreCivic

The main advantage of trading using opposite Civeo Corp and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civeo Corp 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 Civeo Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.