Correlation Between Key Tronic and Cricut

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

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

Diversification Opportunities for Key Tronic and Cricut

0.18

Correlation Coefficient

Key Tronic  Cricut

Average diversification

The 3 months correlation between Key and Cricut is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Key Tronic and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and Key Tronic 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 Key Tronic 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 Key Tronic i.e., Key Tronic and Cricut go up and down completely randomly.

Pair Corralation between Key Tronic and Cricut

Given the investment horizon of 90 days Key Tronic is expected to generate 2.22 times less return on investment than Cricut. But when comparing it to its historical volatility, Key Tronic is 1.27 times less risky than Cricut. It trades about 0.03 of its potential returns per unit of risk. Cricut Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  505.00  in Cricut Inc on September 29, 2024 and sell it today you would earn a total of  76.00  from holding Cricut Inc or generate 15.05% return on investment over 90 days.

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

Key Tronic  vs.  Cricut Inc

Key Tronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Key Tronic 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 rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 Key Tronic and Cricut

The main advantage of trading using opposite Key Tronic and Cricut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Key Tronic 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 Key Tronic 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.