Correlation Between Cimpress and AdTheorent Holding

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

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

Diversification Opportunities for Cimpress and AdTheorent Holding

0.14

Correlation Coefficient

Cimpress  AdTheorent Holding

Average diversification

The 3 months correlation between Cimpress and AdTheorent is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and AdTheorent Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdTheorent Holding and Cimpress 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 Cimpress NV are associated (or correlated) with AdTheorent Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdTheorent Holding has no effect on the direction of Cimpress i.e., Cimpress and AdTheorent Holding go up and down completely randomly.

Pair Corralation between Cimpress and AdTheorent Holding

Given the investment horizon of 90 days Cimpress NV is expected to generate 11.23 times more return on investment than AdTheorent Holding. However, Cimpress is 11.23 times more volatile than AdTheorent Holding. It trades about 0.14 of its potential returns per unit of risk. AdTheorent Holding is currently generating about 0.0 per unit of risk. If you would invest  8,175  in Cimpress NV on March 28, 2024 and sell it today you would earn a total of  482.00  from holding Cimpress NV or generate 5.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Cimpress NV  vs.  AdTheorent Holding

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.

AdTheorent Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdTheorent Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, AdTheorent Holding is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Cimpress and AdTheorent Holding

The main advantage of trading using opposite Cimpress and AdTheorent Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimpress position performs unexpectedly, AdTheorent Holding 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 AdTheorent Holding will offset losses from the drop in AdTheorent Holding's long position.

The idea behind Cimpress NV and AdTheorent Holding 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.