Correlation Between Omnicom and Cimpress
Can any of the company-specific risk be diversified away by investing in both Omnicom 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 Omnicom and Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnicom Group and Cimpress NV, you can compare the effects of market volatilities on Omnicom 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 Omnicom with a short position of Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnicom and Cimpress.
Diversification Opportunities for Omnicom and Cimpress
Very good diversification
The 3 months correlation between Omnicom and Cimpress is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Omnicom Group and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Omnicom 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 Omnicom Group 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 Omnicom i.e., Omnicom and Cimpress go up and down completely randomly.
Pair Corralation between Omnicom and Cimpress
Considering the 90-day investment horizon Omnicom is expected to generate 20.11 times less return on investment than Cimpress. But when comparing it to its historical volatility, Omnicom Group is 1.61 times less risky than Cimpress. It trades about 0.01 of its potential returns per unit of risk. Cimpress NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,713 in Cimpress NV on August 27, 2024 and sell it today you would earn a total of 420.00 from holding Cimpress NV or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omnicom Group vs. Cimpress NV
Performance |
| Timeline |
| Omnicom Group |
| Cimpress NV |
Omnicom and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omnicom and Cimpress
The main advantage of trading using opposite Omnicom and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnicom 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 Omnicom Group 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.| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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