Correlation Between FitLife Brands, and CoreCivic

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

By analyzing existing cross correlation between FitLife Brands, Common and CoreCivic 475 percent, you can compare the effects of market volatilities on FitLife Brands, and CoreCivic 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 FitLife Brands, with a short position of CoreCivic. Check out your portfolio center. Please also check ongoing floating volatility patterns of FitLife Brands, and CoreCivic.

Diversification Opportunities for FitLife Brands, and CoreCivic

0.22

Correlation Coefficient

FitLife Brands,  CoreCivic

Modest diversification

The 3 months correlation between FitLife and CoreCivic is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and CoreCivic 475 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic 475 percent and FitLife Brands, 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 FitLife Brands, Common are associated (or correlated) with CoreCivic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreCivic 475 percent has no effect on the direction of FitLife Brands, i.e., FitLife Brands, and CoreCivic go up and down completely randomly.

Pair Corralation between FitLife Brands, and CoreCivic

Given the investment horizon of 90 days FitLife Brands, Common is expected to under-perform the CoreCivic. In addition to that, FitLife Brands, is 5.98 times more volatile than CoreCivic 475 percent. It trades about -0.08 of its total potential returns per unit of risk. CoreCivic 475 percent is currently generating about -0.01 per unit of volatility. If you would invest  9,705  in CoreCivic 475 percent on December 4, 2024 and sell it today you would lose (8.00) from holding CoreCivic 475 percent or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

FitLife Brands, Common  vs.  CoreCivic 475 percent

FitLife Brands, Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

CoreCivic 475 percent

Risk-Adjusted Performance

Very Weak

Over the last 90 days CoreCivic 475 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CoreCivic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FitLife Brands, and CoreCivic

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

The idea behind FitLife Brands, Common and CoreCivic 475 percent 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.