Correlation Between Cricut and HP

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

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

Diversification Opportunities for Cricut and HP

-0.22

Correlation Coefficient

Cricut  HP

Very good diversification

The 3 months correlation between Cricut and HP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cricut Inc and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc 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 HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of Cricut i.e., Cricut and HP go up and down completely randomly.

Pair Corralation between Cricut and HP

Given the investment horizon of 90 days Cricut Inc is expected to generate 0.9 times more return on investment than HP. However, Cricut Inc is 1.11 times less risky than HP. It trades about 0.2 of its potential returns per unit of risk. HP Inc is currently generating about -0.24 per unit of risk. If you would invest  524.00  in Cricut Inc on September 24, 2024 and sell it today you would earn a total of  57.00  from holding Cricut Inc or generate 10.88% return on investment over 90 days.

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

Cricut Inc  vs.  HP Inc

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 latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

HP Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HP is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cricut and HP

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

The idea behind Cricut Inc and HP 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.