Correlation Between Virco Manufacturing and Cimpress

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

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

Diversification Opportunities for Virco Manufacturing and Cimpress

0.65

Correlation Coefficient

Virco Manufacturing  Cimpress

Poor diversification

The 3 months correlation between Virco and Cimpress is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Virco Manufacturing and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV and Virco Manufacturing 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 Virco Manufacturing 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 Virco Manufacturing i.e., Virco Manufacturing and Cimpress go up and down completely randomly.

Pair Corralation between Virco Manufacturing and Cimpress

Given the investment horizon of 90 days Virco Manufacturing is expected to under-perform the Cimpress. In addition to that, Virco Manufacturing is 1.56 times more volatile than Cimpress NV. It trades about -0.13 of its total potential returns per unit of risk. Cimpress NV is currently generating about -0.07 per unit of volatility. If you would invest  8,011  in Cimpress NV on October 10, 2024 and sell it today you would lose (972.00) from holding Cimpress NV or give up 12.13% of portfolio value over 90 days.

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

Virco Manufacturing  vs.  Cimpress NV

Virco Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virco Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 latest abnormal performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Virco Manufacturing and Cimpress

The main advantage of trading using opposite Virco Manufacturing and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virco Manufacturing 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 Virco Manufacturing 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.