Correlation Between Marlowe Plc and CoreCivic

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

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

Diversification Opportunities for Marlowe Plc and CoreCivic

-0.68

Correlation Coefficient

Marlowe Plc  CoreCivic

Excellent diversification

The 3 months correlation between Marlowe and CoreCivic is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Marlowe plc and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and Marlowe Plc 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 Marlowe plc 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 has no effect on the direction of Marlowe Plc i.e., Marlowe Plc and CoreCivic go up and down completely randomly.

Pair Corralation between Marlowe Plc and CoreCivic

Assuming the 90 days horizon Marlowe plc is expected to generate 0.69 times more return on investment than CoreCivic. However, Marlowe plc is 1.45 times less risky than CoreCivic. It trades about 0.08 of its potential returns per unit of risk. CoreCivic is currently generating about -0.03 per unit of risk. If you would invest  398.00  in Marlowe plc on December 28, 2024 and sell it today you would earn a total of  30.00  from holding Marlowe plc or generate 7.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Marlowe plc  vs.  CoreCivic

Marlowe plc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marlowe plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Marlowe Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 fairly stable basic indicators, CoreCivic is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Marlowe Plc and CoreCivic

The main advantage of trading using opposite Marlowe Plc and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marlowe Plc 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 Marlowe plc and CoreCivic 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.