Correlation Between CoreCivic and Greenwave Technology

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

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

Diversification Opportunities for CoreCivic and Greenwave Technology

0.51

Correlation Coefficient

CoreCivic  Greenwave Technology

Very weak diversification

The 3 months correlation between CoreCivic and Greenwave is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and Greenwave Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenwave 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 Greenwave Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenwave Technology has no effect on the direction of CoreCivic i.e., CoreCivic and Greenwave Technology go up and down completely randomly.

Pair Corralation between CoreCivic and Greenwave Technology

Considering the 90-day investment horizon CoreCivic is expected to under-perform the Greenwave Technology. But the stock apears to be less risky and, when comparing its historical volatility, CoreCivic is 5.64 times less risky than Greenwave Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Greenwave Technology Solutions is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  37.00  in Greenwave Technology Solutions on December 2, 2024 and sell it today you would lose (11.00) from holding Greenwave Technology Solutions or give up 29.73% of portfolio value over 90 days.

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

CoreCivic  vs.  Greenwave Technology Solutions

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.

Greenwave Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenwave Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, Greenwave Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CoreCivic and Greenwave Technology

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

The idea behind CoreCivic and Greenwave Technology Solutions 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.