Correlation Between Cimpress and Arrow Financial
Can any of the company-specific risk be diversified away by investing in both Cimpress and Arrow Financial 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 Arrow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cimpress NV and Arrow Financial, you can compare the effects of market volatilities on Cimpress and Arrow Financial 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 Arrow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cimpress and Arrow Financial.
Diversification Opportunities for Cimpress and Arrow Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cimpress and Arrow is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cimpress NV and Arrow Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Financial 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 Arrow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Financial has no effect on the direction of Cimpress i.e., Cimpress and Arrow Financial go up and down completely randomly.
Pair Corralation between Cimpress and Arrow Financial
Given the investment horizon of 90 days Cimpress NV is expected to under-perform the Arrow Financial. In addition to that, Cimpress is 1.36 times more volatile than Arrow Financial. It trades about -0.03 of its total potential returns per unit of risk. Arrow Financial is currently generating about 0.05 per unit of volatility. If you would invest 2,350 in Arrow Financial on March 16, 2024 and sell it today you would earn a total of 107.00 from holding Arrow Financial or generate 4.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cimpress NV vs. Arrow Financial
Performance |
Timeline |
Cimpress NV |
Arrow Financial |
Cimpress and Arrow Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cimpress and Arrow Financial
The main advantage of trading using opposite Cimpress and Arrow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cimpress position performs unexpectedly, Arrow Financial 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 Arrow Financial will offset losses from the drop in Arrow Financial's long position.Cimpress vs. Innovid Corp | Cimpress vs. Deluxe | Cimpress vs. Omnicom Group | Cimpress vs. Emerald Expositions Events |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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