Correlation Between Cimpress and Deluxe

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

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

Diversification Opportunities for Cimpress and Deluxe

0.96

Correlation Coefficient

Cimpress  Deluxe

Almost no diversification

The 3 months correlation between Cimpress and Deluxe is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe 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 Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Cimpress i.e., Cimpress and Deluxe go up and down completely randomly.

Pair Corralation between Cimpress and Deluxe

Given the investment horizon of 90 days Cimpress NV is expected to under-perform the Deluxe. In addition to that, Cimpress is 1.28 times more volatile than Deluxe. It trades about -0.24 of its total potential returns per unit of risk. Deluxe is currently generating about -0.21 per unit of volatility. If you would invest  2,241  in Deluxe on December 29, 2024 and sell it today you would lose (601.00) from holding Deluxe or give up 26.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Cimpress NV  vs.  Deluxe

Cimpress NV

Risk-Adjusted Performance

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 abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Deluxe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Deluxe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cimpress and Deluxe

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

The idea behind Cimpress NV and Deluxe 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.