Correlation Between Dow Jones and Cimpress
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Cimpress NV, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Cimpress.
Diversification Opportunities for Dow Jones and Cimpress
Very good diversification
The 3 months correlation between Dow and Cimpress is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Cimpress go up and down completely randomly.
Pair Corralation between Dow Jones and Cimpress
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.7 times less return on investment than Cimpress. But when comparing it to its historical volatility, Dow Jones Industrial is 4.79 times less risky than Cimpress. It trades about 0.09 of its potential returns per unit of risk. Cimpress NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,694 in Cimpress NV on August 27, 2024 and sell it today you would earn a total of 4,439 from holding Cimpress NV or generate 120.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Cimpress NV
Performance |
| Timeline |
Dow Jones and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Cimpress NV
Pair trading matchups for Cimpress
Pair Trading with Dow Jones and Cimpress
The main advantage of trading using opposite Dow Jones and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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