Correlation Between CoreCivic and BrightView Holdings

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

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

Diversification Opportunities for CoreCivic and BrightView Holdings

0.64

Correlation Coefficient

CoreCivic  BrightView Holdings

Poor diversification

The 3 months correlation between CoreCivic and BrightView is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CoreCivic and BrightView Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightView Holdings 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 BrightView Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightView Holdings has no effect on the direction of CoreCivic i.e., CoreCivic and BrightView Holdings go up and down completely randomly.

Pair Corralation between CoreCivic and BrightView Holdings

Considering the 90-day investment horizon CoreCivic is expected to generate 1.02 times more return on investment than BrightView Holdings. However, CoreCivic is 1.02 times more volatile than BrightView Holdings. It trades about -0.04 of its potential returns per unit of risk. BrightView Holdings is currently generating about -0.15 per unit of risk. If you would invest  2,222  in CoreCivic on January 3, 2025 and sell it today you would lose (177.00) from holding CoreCivic or give up 7.97% of portfolio value over 90 days.

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

CoreCivic  vs.  BrightView Holdings

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 latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

BrightView Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BrightView Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with CoreCivic and BrightView Holdings

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

The idea behind CoreCivic and BrightView Holdings 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 Stocks Directory module to find actively traded stocks across global markets.