Correlation Between Dell Technologies and Cricut

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

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

Diversification Opportunities for Dell Technologies and Cricut

-0.48

Correlation Coefficient

Dell Technologies  Cricut

Very good diversification

The 3 months correlation between Dell and Cricut is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dell Technologies and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and Dell Technologies 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 Dell Technologies 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 Dell Technologies i.e., Dell Technologies and Cricut go up and down completely randomly.

Pair Corralation between Dell Technologies and Cricut

Given the investment horizon of 90 days Dell Technologies is expected to generate 0.75 times more return on investment than Cricut. However, Dell Technologies is 1.33 times less risky than Cricut. It trades about 0.09 of its potential returns per unit of risk. Cricut Inc is currently generating about 0.0 per unit of risk. If you would invest  3,819  in Dell Technologies on October 3, 2024 and sell it today you would earn a total of  7,663  from holding Dell Technologies or generate 200.65% return on investment over 90 days.

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

Dell Technologies  vs.  Cricut Inc

Dell Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dell Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Dell Technologies is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional 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 comparatively stable fundamental indicators, Cricut is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dell Technologies and Cricut

The main advantage of trading using opposite Dell Technologies and Cricut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dell Technologies 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 Dell Technologies 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.