Correlation Between CoreCivic and Aeries Technology

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

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

Diversification Opportunities for CoreCivic and Aeries Technology

-0.88

Correlation Coefficient

CoreCivic  Aeries Technology

Pay attention - limited upside

The 3 months correlation between CoreCivic and Aeries is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and CoreCivic 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 CoreCivic are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of CoreCivic i.e., CoreCivic and Aeries Technology go up and down completely randomly.

Pair Corralation between CoreCivic and Aeries Technology

Considering the 90-day investment horizon CoreCivic is expected to generate 0.46 times more return on investment than Aeries Technology. However, CoreCivic is 2.16 times less risky than Aeries Technology. It trades about 0.19 of its potential returns per unit of risk. Aeries Technology is currently generating about -0.07 per unit of risk. If you would invest  1,272  in CoreCivic on October 6, 2024 and sell it today you would earn a total of  950.00  from holding CoreCivic or generate 74.69% return on investment over 90 days.

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

CoreCivic  vs.  Aeries Technology

CoreCivic

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCivic are ranked lower than 15 (%) 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.

Aeries Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeries Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CoreCivic and Aeries Technology

The main advantage of trading using opposite CoreCivic and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoreCivic position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.

The idea behind CoreCivic and Aeries Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.