Correlation Between Emclaire Financial and Cimpress

Can any of the company-specific risk be diversified away by investing in both Emclaire Financial 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 Emclaire Financial and Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Emclaire Financial Corp and Cimpress NV, you can compare the effects of market volatilities on Emclaire Financial 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 Emclaire Financial with a short position of Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emclaire Financial and Cimpress.

Diversification Opportunities for Emclaire Financial and Cimpress

0.25

Correlation Coefficient

Emclaire Financial  Cimpress

Modest diversification

The 3 months correlation between Emclaire and Cimpress is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Emclaire Financial Corp and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Emclaire Financial 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 Emclaire Financial Corp 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 Emclaire Financial i.e., Emclaire Financial and Cimpress go up and down completely randomly.

Pair Corralation between Emclaire Financial and Cimpress

If you would invest (100.00) in Emclaire Financial Corp on February 6, 2024 and sell it today you would earn a total of  100.00  from holding Emclaire Financial Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Emclaire Financial Corp  vs.  Cimpress NV

Emclaire Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emclaire Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Emclaire Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Cimpress NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cimpress NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cimpress is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Emclaire Financial and Cimpress

The main advantage of trading using opposite Emclaire Financial and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emclaire Financial 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 Emclaire Financial Corp 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.