Correlation Between SIMON and Cimpress

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

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

Diversification Opportunities for SIMON and Cimpress

-0.49

Correlation Coefficient

SIMON  Cimpress

Very good diversification

The 3 months correlation between SIMON and Cimpress is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SIMON PPTY GROUP and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and SIMON 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 SIMON PPTY GROUP 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 SIMON i.e., SIMON and Cimpress go up and down completely randomly.

Pair Corralation between SIMON and Cimpress

Assuming the 90 days trading horizon SIMON PPTY GROUP is expected to generate 0.46 times more return on investment than Cimpress. However, SIMON PPTY GROUP is 2.15 times less risky than Cimpress. It trades about 0.0 of its potential returns per unit of risk. Cimpress NV is currently generating about -0.3 per unit of risk. If you would invest  8,232  in SIMON PPTY GROUP on December 24, 2024 and sell it today you would lose (18.00) from holding SIMON PPTY GROUP or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	53.33%
Values	Daily Returns

SIMON PPTY GROUP  vs.  Cimpress NV

SIMON PPTY GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days SIMON PPTY GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SIMON is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with SIMON and Cimpress

The main advantage of trading using opposite SIMON and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMON 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 SIMON PPTY GROUP 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.