Correlation Between Planet Image and CoreCivic

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

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

Diversification Opportunities for Planet Image and CoreCivic

0.61

Correlation Coefficient

Planet Image  CoreCivic

Poor diversification

The 3 months correlation between Planet and CoreCivic is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Planet Image International and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and Planet Image 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 Planet Image International 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 Planet Image i.e., Planet Image and CoreCivic go up and down completely randomly.

Pair Corralation between Planet Image and CoreCivic

Given the investment horizon of 90 days Planet Image International is expected to under-perform the CoreCivic. In addition to that, Planet Image is 5.22 times more volatile than CoreCivic. It trades about -0.06 of its total potential returns per unit of risk. CoreCivic is currently generating about -0.03 per unit of volatility. If you would invest  2,158  in CoreCivic on December 29, 2024 and sell it today you would lose (117.00) from holding CoreCivic or give up 5.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Planet Image International  vs.  CoreCivic

Planet Image Interna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Planet Image International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 Planet Image and CoreCivic

The main advantage of trading using opposite Planet Image and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Image 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 Planet Image International 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.