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

-0.66

Correlation Coefficient

Marlowe Plc  CoreCivic

Excellent diversification

The 3 months correlation between Marlowe and CoreCivic is -0.66. 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 1.97 times less return on investment than CoreCivic. In addition to that, Marlowe Plc is 1.57 times more volatile than CoreCivic. It trades about 0.02 of its total potential returns per unit of risk. CoreCivic is currently generating about 0.07 per unit of volatility. If you would invest  895.00  in CoreCivic on December 7, 2024 and sell it today you would earn a total of  1,022  from holding CoreCivic or generate 114.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Marlowe plc  vs.  CoreCivic

Marlowe plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marlowe plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Marlowe Plc is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.