Correlation Between Cardlytics and Cimpress

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

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

Diversification Opportunities for Cardlytics and Cimpress

-0.2

Correlation Coefficient

Cardlytics  Cimpress

Good diversification

The 3 months correlation between Cardlytics and Cimpress is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cardlytics and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Cardlytics 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 Cardlytics 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 Cardlytics i.e., Cardlytics and Cimpress go up and down completely randomly.

Pair Corralation between Cardlytics and Cimpress

Given the investment horizon of 90 days Cardlytics is expected to generate 2.12 times more return on investment than Cimpress. However, Cardlytics is 2.12 times more volatile than Cimpress NV. It trades about 0.02 of its potential returns per unit of risk. Cimpress NV is currently generating about -0.02 per unit of risk. If you would invest  380.00  in Cardlytics on September 18, 2024 and sell it today you would lose (7.00) from holding Cardlytics or give up 1.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cardlytics  vs.  Cimpress NV

Cardlytics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cardlytics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Cardlytics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 Cardlytics and Cimpress

The main advantage of trading using opposite Cardlytics and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardlytics 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 Cardlytics 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.