Correlation Between NL Industries and CoreCivic

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

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

Diversification Opportunities for NL Industries and CoreCivic

0.76

Correlation Coefficient

NL Industries  CoreCivic

Poor diversification

The 3 months correlation between NL Industries and CoreCivic is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries and CoreCivic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCivic and NL Industries 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 NL Industries 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 NL Industries i.e., NL Industries and CoreCivic go up and down completely randomly.

Pair Corralation between NL Industries and CoreCivic

Allowing for the 90-day total investment horizon NL Industries is expected to under-perform the CoreCivic. In addition to that, NL Industries is 1.75 times more volatile than CoreCivic. It trades about -0.16 of its total potential returns per unit of risk. CoreCivic is currently generating about -0.08 per unit of volatility. If you would invest  2,202  in CoreCivic on May 8, 2025 and sell it today you would lose (191.00) from holding CoreCivic or give up 8.67% of portfolio value over 90 days.

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

NL Industries  vs.  CoreCivic

NL Industries

Risk-Adjusted Performance

Weakest

Over the last 90 days NL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

CoreCivic

Risk-Adjusted Performance

Weakest

Over the last 90 days CoreCivic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

Pair Trading with NL Industries and CoreCivic

The main advantage of trading using opposite NL Industries and CoreCivic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries 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 NL Industries 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..