Correlation Between CoreCivic and Viad Corp

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

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

Diversification Opportunities for CoreCivic and Viad Corp

0.87

Correlation Coefficient

CoreCivic  Viad Corp

Very poor diversification

The 3 months correlation between CoreCivic and Viad is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and Viad Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viad Corp 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 Viad Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viad Corp has no effect on the direction of CoreCivic i.e., CoreCivic and Viad Corp go up and down completely randomly.

Pair Corralation between CoreCivic and Viad Corp

Considering the 90-day investment horizon CoreCivic is expected to generate 1.63 times more return on investment than Viad Corp. However, CoreCivic is 1.63 times more volatile than Viad Corp. It trades about 0.16 of its potential returns per unit of risk. Viad Corp is currently generating about 0.16 per unit of risk. If you would invest  1,320  in CoreCivic on September 5, 2024 and sell it today you would earn a total of  815.00  from holding CoreCivic or generate 61.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

CoreCivic  vs.  Viad Corp

CoreCivic

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCivic are ranked lower than 12 (%) 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.

Viad Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Viad Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Viad Corp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CoreCivic and Viad Corp

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

The idea behind CoreCivic and Viad Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.