Correlation Between VSE and Cimpress

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

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

Diversification Opportunities for VSE and Cimpress

0.63

Correlation Coefficient

VSE  Cimpress

Poor diversification

The 3 months correlation between VSE and Cimpress is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and VSE 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 VSE Corporation 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 VSE i.e., VSE and Cimpress go up and down completely randomly.

Pair Corralation between VSE and Cimpress

Given the investment horizon of 90 days VSE is expected to generate 1.06 times less return on investment than Cimpress. But when comparing it to its historical volatility, VSE Corporation is 1.14 times less risky than Cimpress. It trades about 0.18 of its potential returns per unit of risk. Cimpress NV is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  4,007  in Cimpress NV on May 6, 2025 and sell it today you would earn a total of  1,381  from holding Cimpress NV or generate 34.46% return on investment over 90 days.

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

VSE Corp.  vs.  Cimpress NV

VSE Corporation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VSE Corporation are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, VSE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cimpress NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cimpress NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Cimpress reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VSE and Cimpress

The main advantage of trading using opposite VSE and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VSE 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 VSE Corporation 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.