Correlation Between CoreCivic and ADT

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

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

Diversification Opportunities for CoreCivic and ADT

-0.29

Correlation Coefficient

CoreCivic  ADT

Very good diversification

The 3 months correlation between CoreCivic and ADT is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and ADT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADT Inc 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 ADT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADT Inc has no effect on the direction of CoreCivic i.e., CoreCivic and ADT go up and down completely randomly.

Pair Corralation between CoreCivic and ADT

Considering the 90-day investment horizon CoreCivic is expected to under-perform the ADT. In addition to that, CoreCivic is 1.22 times more volatile than ADT Inc. It trades about -0.14 of its total potential returns per unit of risk. ADT Inc is currently generating about 0.04 per unit of volatility. If you would invest  808.00  in ADT Inc on May 4, 2025 and sell it today you would earn a total of  22.00  from holding ADT Inc or generate 2.72% return on investment over 90 days.

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

CoreCivic  vs.  ADT Inc

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 unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

ADT Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADT Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, ADT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CoreCivic and ADT

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

The idea behind CoreCivic and ADT Inc 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 Transaction History module to view history of all your transactions and understand their impact on performance.