Correlation Between Markforged Holding and Cricut

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

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

Diversification Opportunities for Markforged Holding and Cricut

0.36

Correlation Coefficient

Markforged Holding  Cricut

Weak diversification

The 3 months correlation between Markforged and Cricut is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Markforged Holding Corp and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and Markforged Holding 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 Markforged Holding Corp 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 Markforged Holding i.e., Markforged Holding and Cricut go up and down completely randomly.

Pair Corralation between Markforged Holding and Cricut

Given the investment horizon of 90 days Markforged Holding is expected to generate 2.09 times less return on investment than Cricut. In addition to that, Markforged Holding is 2.53 times more volatile than Cricut Inc. It trades about 0.01 of its total potential returns per unit of risk. Cricut Inc is currently generating about 0.05 per unit of volatility. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Markforged Holding Corp  vs.  Cricut Inc

Markforged Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Markforged Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Markforged Holding and Cricut

The main advantage of trading using opposite Markforged Holding and Cricut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markforged Holding 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 Markforged Holding Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.