Correlation Between CoreCivic and YY Group

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

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

Diversification Opportunities for CoreCivic and YY Group

0.92

Correlation Coefficient

CoreCivic  YY Group

Almost no diversification

The 3 months correlation between CoreCivic and YYGH is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and YY Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Group Holding 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 YY Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Group Holding has no effect on the direction of CoreCivic i.e., CoreCivic and YY Group go up and down completely randomly.

Pair Corralation between CoreCivic and YY Group

Considering the 90-day investment horizon CoreCivic is expected to generate 1.66 times more return on investment than YY Group. However, CoreCivic is 1.66 times more volatile than YY Group Holding. It trades about 0.21 of its potential returns per unit of risk. YY Group Holding is currently generating about 0.05 per unit of risk. If you would invest  1,363  in CoreCivic on October 6, 2024 and sell it today you would earn a total of  859.00  from holding CoreCivic or generate 63.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	97.62%
Values	Daily Returns

CoreCivic  vs.  YY Group Holding

CoreCivic

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCivic are ranked lower than 15 (%) 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.

YY Group Holding

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with CoreCivic and YY Group

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

The idea behind CoreCivic and YY Group Holding 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.