Correlation Between NetApp and Cricut

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

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

Diversification Opportunities for NetApp and Cricut

-0.11

Correlation Coefficient

NetApp  Cricut

Good diversification

The 3 months correlation between NetApp and Cricut is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NetApp Inc and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and NetApp 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 NetApp Inc 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 NetApp i.e., NetApp and Cricut go up and down completely randomly.

Pair Corralation between NetApp and Cricut

Given the investment horizon of 90 days NetApp Inc is expected to under-perform the Cricut. But the stock apears to be less risky and, when comparing its historical volatility, NetApp Inc is 1.07 times less risky than Cricut. The stock trades about -0.11 of its potential returns per unit of risk. The Cricut Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  524.00  in Cricut Inc on September 24, 2024 and sell it today you would earn a total of  57.00  from holding Cricut Inc or generate 10.88% return on investment over 90 days.

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

NetApp Inc  vs.  Cricut Inc

NetApp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NetApp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail 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 latest uncertain 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 NetApp and Cricut

The main advantage of trading using opposite NetApp and Cricut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetApp 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 NetApp Inc 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 CEOs Directory module to screen CEOs from public companies around the world.