Correlation Between Zedge and Cimpress
Can any of the company-specific risk be diversified away by investing in both Zedge 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 Zedge and Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zedge Inc and Cimpress NV, you can compare the effects of market volatilities on Zedge 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 Zedge with a short position of Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zedge and Cimpress.
Diversification Opportunities for Zedge and Cimpress
Weak diversification
The 3 months correlation between Zedge and Cimpress is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Zedge 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 Zedge Inc 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 Zedge i.e., Zedge and Cimpress go up and down completely randomly.
Pair Corralation between Zedge and Cimpress
Given the investment horizon of 90 days Zedge Inc is expected to generate 1.31 times more return on investment than Cimpress. However, Zedge is 1.31 times more volatile than Cimpress NV. It trades about -0.06 of its potential returns per unit of risk. Cimpress NV is currently generating about -0.09 per unit of risk. If you would invest 319.00 in Zedge Inc on September 2, 2024 and sell it today you would lose (51.00) from holding Zedge Inc or give up 15.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zedge Inc vs. Cimpress NV
Performance |
| Timeline |
| Zedge Inc |
| Cimpress NV |
Zedge and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zedge and Cimpress
The main advantage of trading using opposite Zedge and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedge 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 Zedge Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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