Correlation Between AstroNova and Cricut

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

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

Diversification Opportunities for AstroNova and Cricut

-0.5

Correlation Coefficient

AstroNova  Cricut

Very good diversification

The 3 months correlation between AstroNova and Cricut is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and AstroNova 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 AstroNova 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 AstroNova i.e., AstroNova and Cricut go up and down completely randomly.

Pair Corralation between AstroNova and Cricut

Given the investment horizon of 90 days AstroNova is expected to under-perform the Cricut. In addition to that, AstroNova is 1.18 times more volatile than Cricut Inc. It trades about -0.32 of its total potential returns per unit of risk. Cricut Inc is currently generating about 0.22 per unit of volatility. If you would invest  519.00  in Cricut Inc on September 29, 2024 and sell it today you would earn a total of  62.00  from holding Cricut Inc or generate 11.95% return on investment over 90 days.

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

AstroNova  vs.  Cricut Inc

AstroNova

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AstroNova has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AstroNova is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private 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 AstroNova and Cricut

The main advantage of trading using opposite AstroNova and Cricut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova 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 AstroNova 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.