Correlation Between Cimpress and Caravelle International

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

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

Diversification Opportunities for Cimpress and Caravelle International

-0.48

Correlation Coefficient

Cimpress  Caravelle International

Very good diversification

The 3 months correlation between Cimpress and Caravelle is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International 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 Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of Cimpress i.e., Cimpress and Caravelle International go up and down completely randomly.

Pair Corralation between Cimpress and Caravelle International

Given the investment horizon of 90 days Cimpress is expected to generate 2.22 times less return on investment than Caravelle International. But when comparing it to its historical volatility, Cimpress NV is 2.54 times less risky than Caravelle International. It trades about 0.06 of its potential returns per unit of risk. Caravelle International Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Caravelle International Group on October 11, 2024 and sell it today you would earn a total of  137.00  from holding Caravelle International Group or generate 85.63% return on investment over 90 days.

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

Cimpress NV  vs.  Caravelle International Group

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

Caravelle International

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cimpress and Caravelle International

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

The idea behind Cimpress NV and Caravelle International Group 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.