Correlation Between Cimpress and Magnite
Can any of the company-specific risk be diversified away by investing in both Cimpress and Magnite 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 Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cimpress NV and Magnite, you can compare the effects of market volatilities on Cimpress and Magnite 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 Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimpress and Magnite.
Diversification Opportunities for Cimpress and Magnite
Average diversification
The 3 months correlation between Cimpress and Magnite is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite 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 Magnite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnite has no effect on the direction of Cimpress i.e., Cimpress and Magnite go up and down completely randomly.
Pair Corralation between Cimpress and Magnite
Given the investment horizon of 90 days Cimpress NV is expected to under-perform the Magnite. But the stock apears to be less risky and, when comparing its historical volatility, Cimpress NV is 1.26 times less risky than Magnite. The stock trades about -0.06 of its potential returns per unit of risk. The Magnite is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,206 in Magnite on October 5, 2024 and sell it today you would earn a total of 404.00 from holding Magnite or generate 33.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cimpress NV vs. Magnite
Performance |
Timeline |
Cimpress NV |
Magnite |
Cimpress and Magnite Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cimpress and Magnite
The main advantage of trading using opposite Cimpress and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimpress position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite's long position.Cimpress vs. Innovid Corp | Cimpress vs. Deluxe | Cimpress vs. Omnicom Group | Cimpress vs. Emerald Expositions Events |
Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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