Correlation Between Cirmaker Technology and All American

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

By analyzing existing cross correlation between Cirmaker Technology and All American Pet, you can compare the effects of market volatilities on Cirmaker Technology and All American 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 Cirmaker Technology with a short position of All American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cirmaker Technology and All American.

Diversification Opportunities for Cirmaker Technology and All American

-0.51

Correlation Coefficient

Cirmaker Technology  All American

Excellent diversification

The 3 months correlation between Cirmaker and All is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cirmaker Technology and All American Pet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All American Pet and Cirmaker Technology 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 Cirmaker Technology are associated (or correlated) with All American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All American Pet has no effect on the direction of Cirmaker Technology i.e., Cirmaker Technology and All American go up and down completely randomly.

Pair Corralation between Cirmaker Technology and All American

Given the investment horizon of 90 days Cirmaker Technology is expected to generate 0.2 times more return on investment than All American. However, Cirmaker Technology is 5.0 times less risky than All American. It trades about 0.24 of its potential returns per unit of risk. All American Pet is currently generating about -0.24 per unit of risk. If you would invest  4.50  in Cirmaker Technology on October 24, 2024 and sell it today you would earn a total of  0.90  from holding Cirmaker Technology or generate 20.0% return on investment over 90 days.

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

Cirmaker Technology  vs.  All American Pet

Cirmaker Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cirmaker Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Cirmaker Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

All American Pet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days All American Pet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cirmaker Technology and All American

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

The idea behind Cirmaker Technology and All American Pet 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.