Correlation Between Cimpress and Trio Tech

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

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

Diversification Opportunities for Cimpress and Trio Tech

0.25

Correlation Coefficient

Cimpress  Trio Tech

Modest diversification

The 3 months correlation between Cimpress and Trio is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech 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 Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of Cimpress i.e., Cimpress and Trio Tech go up and down completely randomly.

Pair Corralation between Cimpress and Trio Tech

Given the investment horizon of 90 days Cimpress NV is expected to under-perform the Trio Tech. In addition to that, Cimpress is 1.31 times more volatile than Trio Tech International. It trades about -0.27 of its total potential returns per unit of risk. Trio Tech International is currently generating about 0.04 per unit of volatility. If you would invest  600.00  in Trio Tech International on December 19, 2024 and sell it today you would earn a total of  21.00  from holding Trio Tech International or generate 3.5% return on investment over 90 days.

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

Cimpress NV  vs.  Trio Tech International

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.

Trio Tech International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trio Tech International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Trio Tech is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cimpress and Trio Tech

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

The idea behind Cimpress NV and Trio Tech International 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.