Correlation Between Marchex and Cimpress

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

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

Diversification Opportunities for Marchex and Cimpress

0.48

Correlation Coefficient

Marchex  Cimpress

Very weak diversification

The 3 months correlation between Marchex and Cimpress is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Marchex and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Marchex 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 Marchex are associated (or correlated) with Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of Marchex i.e., Marchex and Cimpress go up and down completely randomly.

Pair Corralation between Marchex and Cimpress

Given the investment horizon of 90 days Marchex is expected to generate 39.33 times less return on investment than Cimpress. In addition to that, Marchex is 1.51 times more volatile than Cimpress NV. It trades about 0.0 of its total potential returns per unit of risk. Cimpress NV is currently generating about 0.29 per unit of volatility. If you would invest  6,901  in Cimpress NV on September 1, 2024 and sell it today you would earn a total of  1,129  from holding Cimpress NV or generate 16.36% return on investment over 90 days.

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

Marchex  vs.  Cimpress NV

Marchex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marchex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Marchex is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Cimpress NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cimpress NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Marchex and Cimpress

The main advantage of trading using opposite Marchex and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex position performs unexpectedly, Cimpress 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 Cimpress will offset losses from the drop in Cimpress' long position.

The idea behind Marchex and Cimpress NV 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.