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
Very good diversification
The 3 months correlation between VSE and Cimpress is -0.38. 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 Corporation is expected to generate 0.82 times more return on investment than Cimpress. However, VSE Corporation is 1.22 times less risky than Cimpress. It trades about 0.15 of its potential returns per unit of risk. Cimpress NV is currently generating about 0.09 per unit of risk. If you would invest 10,618 in VSE Corporation on August 31, 2024 and sell it today you would earn a total of 881.00 from holding VSE Corporation or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VSE Corp. vs. Cimpress NV
Performance |
| Timeline |
| VSE Corporation |
| Cimpress NV |
VSE and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
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.| VSE vs. Park Electrochemical | VSE vs. Innovative Solutions and | VSE vs. Curtiss Wright | VSE vs. National Presto Industries |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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