Correlation Between Cimpress and INEO Tech
Can any of the company-specific risk be diversified away by investing in both Cimpress and INEO Tech 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 Cimpress and INEO Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cimpress NV and INEO Tech Corp, you can compare the effects of market volatilities on Cimpress and INEO Tech 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 Cimpress with a short position of INEO Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimpress and INEO Tech.
Diversification Opportunities for Cimpress and INEO Tech
Very good diversification
The 3 months correlation between Cimpress and INEO is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and INEO Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INEO Tech Corp and Cimpress 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 Cimpress NV are associated (or correlated) with INEO Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INEO Tech Corp has no effect on the direction of Cimpress i.e., Cimpress and INEO Tech go up and down completely randomly.
Pair Corralation between Cimpress and INEO Tech
Given the investment horizon of 90 days Cimpress NV is expected to under-perform the INEO Tech. But the stock apears to be less risky and, when comparing its historical volatility, Cimpress NV is 3.19 times less risky than INEO Tech. The stock trades about -0.04 of its potential returns per unit of risk. The INEO Tech Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4.00 in INEO Tech Corp on July 9, 2024 and sell it today you would earn a total of 1.80 from holding INEO Tech Corp or generate 45.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cimpress NV vs. INEO Tech Corp
Performance |
Timeline |
Cimpress NV |
INEO Tech Corp |
Cimpress and INEO Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cimpress and INEO Tech
The main advantage of trading using opposite Cimpress and INEO Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimpress position performs unexpectedly, INEO Tech 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 INEO Tech will offset losses from the drop in INEO Tech's long position.Cimpress vs. Innovid Corp | Cimpress vs. Deluxe | Cimpress vs. Omnicom Group | Cimpress vs. Emerald Expositions Events |
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 Stocks Directory module to find actively traded stocks across global markets.
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