Correlation Between Corsair Gaming and Cricut

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

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

Diversification Opportunities for Corsair Gaming and Cricut

-0.41

Correlation Coefficient

Corsair Gaming  Cricut

Very good diversification

The 3 months correlation between Corsair and Cricut is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with Cricut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cricut Inc has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and Cricut go up and down completely randomly.

Pair Corralation between Corsair Gaming and Cricut

Given the investment horizon of 90 days Corsair Gaming is expected to under-perform the Cricut. In addition to that, Corsair Gaming is 1.4 times more volatile than Cricut Inc. It trades about -0.1 of its total potential returns per unit of risk. Cricut Inc is currently generating about 0.23 per unit of volatility. If you would invest  516.00  in Cricut Inc on September 28, 2024 and sell it today you would earn a total of  65.00  from holding Cricut Inc or generate 12.6% return on investment over 90 days.

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

Corsair Gaming  vs.  Cricut Inc

Corsair Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Corsair Gaming and Cricut

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

The idea behind Corsair Gaming and Cricut 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.