Correlation Between Immersion and Cricut

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

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

Diversification Opportunities for Immersion and Cricut

-0.16

Correlation Coefficient

Immersion  Cricut

Good diversification

The 3 months correlation between Immersion and Cricut is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Immersion and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and Immersion 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 Immersion 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 Immersion i.e., Immersion and Cricut go up and down completely randomly.

Pair Corralation between Immersion and Cricut

Given the investment horizon of 90 days Immersion is expected to generate 0.71 times more return on investment than Cricut. However, Immersion is 1.4 times less risky than Cricut. It trades about 0.05 of its potential returns per unit of risk. Cricut Inc is currently generating about -0.04 per unit of risk. If you would invest  862.00  in Immersion on September 23, 2024 and sell it today you would earn a total of  47.00  from holding Immersion or generate 5.45% return on investment over 90 days.

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

Immersion  vs.  Cricut Inc

Immersion

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immersion are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Immersion may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 latest inconsistent performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Immersion and Cricut

The main advantage of trading using opposite Immersion and Cricut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immersion 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 Immersion 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 Global Correlations module to find global opportunities by holding instruments from different markets.