Correlation Between Cricut and D Wave

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

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

Diversification Opportunities for Cricut and D Wave

-0.14

Correlation Coefficient

Cricut  D Wave

Good diversification

The 3 months correlation between Cricut and QBTS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cricut Inc and D Wave Quantum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D Wave Quantum 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 D Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D Wave Quantum has no effect on the direction of Cricut i.e., Cricut and D Wave go up and down completely randomly.

Pair Corralation between Cricut and D Wave

Given the investment horizon of 90 days Cricut Inc is expected to under-perform the D Wave. But the stock apears to be less risky and, when comparing its historical volatility, Cricut Inc is 5.38 times less risky than D Wave. The stock trades about -0.04 of its potential returns per unit of risk. The D Wave Quantum is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  930.00  in D Wave Quantum on December 28, 2024 and sell it today you would lose (103.00) from holding D Wave Quantum or give up 11.08% of portfolio value over 90 days.

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

Cricut Inc  vs.  D Wave Quantum

Cricut Inc

Risk-Adjusted Performance

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

D Wave Quantum

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in D Wave Quantum are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, D Wave unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cricut and D Wave

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

The idea behind Cricut Inc and D Wave Quantum 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.