Correlation Between Cricut and Super Micro

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

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

Diversification Opportunities for Cricut and Super Micro

0.6

Correlation Coefficient

Cricut  Super Micro

Poor diversification

The 3 months correlation between Cricut and Super is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cricut Inc and Super Micro Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Micro Computer 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 Super Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Micro Computer has no effect on the direction of Cricut i.e., Cricut and Super Micro go up and down completely randomly.

Pair Corralation between Cricut and Super Micro

Given the investment horizon of 90 days Cricut Inc is expected to under-perform the Super Micro. But the stock apears to be less risky and, when comparing its historical volatility, Cricut Inc is 2.78 times less risky than Super Micro. The stock trades about -0.04 of its potential returns per unit of risk. The Super Micro Computer is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  4,418  in Super Micro Computer on September 2, 2024 and sell it today you would lose (1,154) from holding Super Micro Computer or give up 26.12% of portfolio value over 90 days.

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

Cricut Inc  vs.  Super Micro Computer

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.

Super Micro Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Super Micro Computer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Super Micro is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cricut and Super Micro

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

The idea behind Cricut Inc and Super Micro Computer 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 CEOs Directory module to screen CEOs from public companies around the world.