Correlation Between Cricut and Silicom

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

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

Diversification Opportunities for Cricut and Silicom

-0.37

Correlation Coefficient

Cricut  Silicom

Very good diversification

The 3 months correlation between Cricut and Silicom is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cricut Inc and Silicom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicom 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 Silicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicom has no effect on the direction of Cricut i.e., Cricut and Silicom go up and down completely randomly.

Pair Corralation between Cricut and Silicom

Given the investment horizon of 90 days Cricut Inc is expected to under-perform the Silicom. In addition to that, Cricut is 1.19 times more volatile than Silicom. It trades about -0.04 of its total potential returns per unit of risk. Silicom is currently generating about 0.01 per unit of volatility. If you would invest  1,320  in Silicom on September 2, 2024 and sell it today you would lose (17.00) from holding Silicom or give up 1.29% 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.  Silicom

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.

Silicom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silicom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Silicom is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cricut and Silicom

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

The idea behind Cricut Inc and Silicom 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.