Correlation Between Cricut and Hewlett Packard

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

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

Diversification Opportunities for Cricut and Hewlett Packard

-0.65

Correlation Coefficient

Cricut  Hewlett Packard

Excellent diversification

The 3 months correlation between Cricut and Hewlett is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cricut Inc and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente 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 Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of Cricut i.e., Cricut and Hewlett Packard go up and down completely randomly.

Pair Corralation between Cricut and Hewlett Packard

Given the investment horizon of 90 days Cricut Inc is expected to generate 1.3 times more return on investment than Hewlett Packard. However, Cricut is 1.3 times more volatile than Hewlett Packard Enterprise. It trades about 0.05 of its potential returns per unit of risk. Hewlett Packard Enterprise is currently generating about 0.03 per unit of risk. If you would invest  505.00  in Cricut Inc on September 27, 2024 and sell it today you would earn a total of  77.00  from holding Cricut Inc or generate 15.25% return on investment over 90 days.

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

Cricut Inc  vs.  Hewlett Packard Enterprise

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 uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hewlett Packard Ente

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hewlett Packard Enterprise are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Hewlett Packard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cricut and Hewlett Packard

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

The idea behind Cricut Inc and Hewlett Packard Enterprise 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.