Correlation Between Cimpress and Fluent

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

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

Diversification Opportunities for Cimpress and Fluent

0.21

Correlation Coefficient

Cimpress  Fluent

Modest diversification

The 3 months correlation between Cimpress and Fluent is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent Inc 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 Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of Cimpress i.e., Cimpress and Fluent go up and down completely randomly.

Pair Corralation between Cimpress and Fluent

Given the investment horizon of 90 days Cimpress NV is expected to generate 0.71 times more return on investment than Fluent. However, Cimpress NV is 1.41 times less risky than Fluent. It trades about -0.01 of its potential returns per unit of risk. Fluent Inc is currently generating about -0.02 per unit of risk. If you would invest  7,586  in Cimpress NV on October 25, 2024 and sell it today you would lose (313.00) from holding Cimpress NV or give up 4.13% of portfolio value over 90 days.

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

Cimpress NV  vs.  Fluent Inc

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.

Fluent Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluent Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fluent is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cimpress and Fluent

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

The idea behind Cimpress NV and Fluent Inc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.