Correlation Between CoreCivic and ATIF Holdings

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

By analyzing existing cross correlation between CoreCivic and ATIF Holdings, you can compare the effects of market volatilities on CoreCivic and ATIF Holdings 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 ATIF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreCivic and ATIF Holdings.

Diversification Opportunities for CoreCivic and ATIF Holdings

-0.78

Correlation Coefficient

CoreCivic  ATIF Holdings

Pay attention - limited upside

The 3 months correlation between CoreCivic and ATIF is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and ATIF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATIF Holdings 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 ATIF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATIF Holdings has no effect on the direction of CoreCivic i.e., CoreCivic and ATIF Holdings go up and down completely randomly.

Pair Corralation between CoreCivic and ATIF Holdings

Considering the 90-day investment horizon CoreCivic is expected to generate 0.53 times more return on investment than ATIF Holdings. However, CoreCivic is 1.88 times less risky than ATIF Holdings. It trades about 0.18 of its potential returns per unit of risk. ATIF Holdings is currently generating about -0.01 per unit of risk. If you would invest  1,280  in CoreCivic on September 12, 2024 and sell it today you would earn a total of  929.00  from holding CoreCivic or generate 72.58% return on investment over 90 days.

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

CoreCivic  vs.  ATIF Holdings

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.

ATIF Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATIF Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CoreCivic and ATIF Holdings

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

The idea behind CoreCivic and ATIF Holdings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.