Correlation Between Quantum and Cricut

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

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

Diversification Opportunities for Quantum and Cricut

-0.23

Correlation Coefficient

Quantum  Cricut

Very good diversification

The 3 months correlation between Quantum and Cricut is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Cricut Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cricut Inc and Quantum 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 Quantum 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 Quantum i.e., Quantum and Cricut go up and down completely randomly.

Pair Corralation between Quantum and Cricut

Given the investment horizon of 90 days Quantum is expected to generate 17.7 times more return on investment than Cricut. However, Quantum is 17.7 times more volatile than Cricut Inc. It trades about 0.31 of its potential returns per unit of risk. Cricut Inc is currently generating about 0.28 per unit of risk. If you would invest  913.00  in Quantum on September 23, 2024 and sell it today you would earn a total of  3,687  from holding Quantum or generate 403.83% return on investment over 90 days.

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

Quantum  vs.  Cricut Inc

Quantum

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

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 Quantum and Cricut

The main advantage of trading using opposite Quantum and Cricut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantum 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 Quantum 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.