Correlation Between Key Tronic and Cricut

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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

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Key and Cricut is 0.25. 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 under-perform the Cricut. But the stock apears to be less risky and, when comparing its historical volatility, Key Tronic is 1.54 times less risky than Cricut. The stock trades about -0.22 of its potential returns per unit of risk. The Cricut Inc is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  591.00  in Cricut Inc on September 10, 2024 and sell it today you would lose (29.00) from holding Cricut Inc or give up 4.91% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Key Tronic  vs.  Cricut Inc

 Performance 
       Timeline  
Key Tronic 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Key Tronic are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Key Tronic exhibited solid returns over the last few months and may actually be approaching a breakup point.
Cricut Inc 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Cricut Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Cricut is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Key Tronic and Cricut Volatility Contrast

   Predicted Return Density   
       Returns  

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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