Correlation Between Cricut and Dell Technologies

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

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

Diversification Opportunities for Cricut and Dell Technologies

-0.48

Correlation Coefficient

Cricut  Dell Technologies

Very good diversification

The 3 months correlation between Cricut and Dell is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cricut Inc and Dell Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dell Technologies and Cricut 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 Cricut Inc are associated (or correlated) with Dell Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dell Technologies has no effect on the direction of Cricut i.e., Cricut and Dell Technologies go up and down completely randomly.

Pair Corralation between Cricut and Dell Technologies

Given the investment horizon of 90 days Cricut is expected to generate 25.85 times less return on investment than Dell Technologies. In addition to that, Cricut is 1.33 times more volatile than Dell Technologies. It trades about 0.0 of its total potential returns per unit of risk. Dell Technologies is currently generating about 0.09 per unit of volatility. If you would invest  3,819  in Dell Technologies on October 3, 2024 and sell it today you would earn a total of  7,663  from holding Dell Technologies or generate 200.65% return on investment over 90 days.

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

Cricut Inc  vs.  Dell Technologies

Cricut Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cricut Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Cricut is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Dell Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Dell Technologies is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cricut and Dell Technologies

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

The idea behind Cricut Inc and Dell Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.