Correlation Between Daily Journal and Cimpress

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

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

Diversification Opportunities for Daily Journal and Cimpress

-0.14

Correlation Coefficient

Daily Journal  Cimpress

Good diversification

The 3 months correlation between Daily and Cimpress is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Daily Journal 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 Daily Journal Corp are associated (or correlated) with Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of Daily Journal i.e., Daily Journal and Cimpress go up and down completely randomly.

Pair Corralation between Daily Journal and Cimpress

Given the investment horizon of 90 days Daily Journal Corp is expected to generate 1.05 times more return on investment than Cimpress. However, Daily Journal is 1.05 times more volatile than Cimpress NV. It trades about 0.09 of its potential returns per unit of risk. Cimpress NV is currently generating about -0.11 per unit of risk. If you would invest  49,711  in Daily Journal Corp on August 30, 2024 and sell it today you would earn a total of  6,840  from holding Daily Journal Corp or generate 13.76% return on investment over 90 days.

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

Daily Journal Corp  vs.  Cimpress NV

Daily Journal Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Daily Journal displayed solid returns over the last few months and may actually be approaching a breakup point.

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 December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Daily Journal and Cimpress

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

The idea behind Daily Journal Corp and Cimpress NV 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.