Correlation Between CoreCivic and Dun Bradstreet

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

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

Diversification Opportunities for CoreCivic and Dun Bradstreet

0.49

Correlation Coefficient

CoreCivic  Dun Bradstreet

Very weak diversification

The 3 months correlation between CoreCivic and Dun is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and Dun Bradstreet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dun Bradstreet 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 Dun Bradstreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dun Bradstreet Holdings has no effect on the direction of CoreCivic i.e., CoreCivic and Dun Bradstreet go up and down completely randomly.

Pair Corralation between CoreCivic and Dun Bradstreet

Considering the 90-day investment horizon CoreCivic is expected to generate 1.0 times more return on investment than Dun Bradstreet. However, CoreCivic is 1.0 times more volatile than Dun Bradstreet Holdings. It trades about -0.02 of its potential returns per unit of risk. Dun Bradstreet Holdings is currently generating about -0.19 per unit of risk. If you would invest  2,158  in CoreCivic on December 28, 2024 and sell it today you would lose (96.00) from holding CoreCivic or give up 4.45% of portfolio value over 90 days.

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

CoreCivic  vs.  Dun Bradstreet Holdings

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.

Dun Bradstreet Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dun Bradstreet Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CoreCivic and Dun Bradstreet

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

The idea behind CoreCivic and Dun Bradstreet 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.