Correlation Between Western Asset and Cimpress
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Investment and Cimpress NV, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Cimpress.
Diversification Opportunities for Western Asset and Cimpress
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Cimpress is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Western Asset 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 Western Asset Investment 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 Western Asset i.e., Western Asset and Cimpress go up and down completely randomly.
Pair Corralation between Western Asset and Cimpress
Considering the 90-day investment horizon Western Asset is expected to generate 5.69 times less return on investment than Cimpress. But when comparing it to its historical volatility, Western Asset Investment is 4.38 times less risky than Cimpress. It trades about 0.04 of its potential returns per unit of risk. Cimpress NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,430 in Cimpress NV on September 2, 2024 and sell it today you would earn a total of 2,600 from holding Cimpress NV or generate 47.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. Cimpress NV
Performance |
| Timeline |
| Western Asset Investment |
| Cimpress NV |
Western Asset and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Cimpress
The main advantage of trading using opposite Western Asset and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Visa Class A | Western Asset vs. Diamond Hill Investment | Western Asset vs. Distoken Acquisition | Western Asset vs. Associated Capital Group |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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