Correlation Between CoreCivic and Genpact

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

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

Diversification Opportunities for CoreCivic and Genpact

-0.86

Correlation Coefficient

CoreCivic  Genpact

Pay attention - limited upside

The 3 months correlation between CoreCivic and Genpact is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited 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 Genpact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genpact Limited has no effect on the direction of CoreCivic i.e., CoreCivic and Genpact go up and down completely randomly.

Pair Corralation between CoreCivic and Genpact

Considering the 90-day investment horizon CoreCivic is expected to generate 1.17 times less return on investment than Genpact. In addition to that, CoreCivic is 1.95 times more volatile than Genpact Limited. It trades about 0.05 of its total potential returns per unit of risk. Genpact Limited is currently generating about 0.1 per unit of volatility. If you would invest  3,339  in Genpact Limited on December 8, 2024 and sell it today you would earn a total of  1,817  from holding Genpact Limited or generate 54.42% return on investment over 90 days.

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

CoreCivic  vs.  Genpact Limited

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 uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Genpact Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Genpact reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CoreCivic and Genpact

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

The idea behind CoreCivic and Genpact Limited 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.