Correlation Between CiT and Global Blue
Can any of the company-specific risk be diversified away by investing in both CiT and Global Blue 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 CiT and Global Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CiT Inc and Global Blue Group, you can compare the effects of market volatilities on CiT and Global Blue 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 CiT with a short position of Global Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of CiT and Global Blue.
Diversification Opportunities for CiT and Global Blue
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CiT and Global is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CiT Inc and Global Blue Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blue Group and CiT 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 CiT Inc are associated (or correlated) with Global Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blue Group has no effect on the direction of CiT i.e., CiT and Global Blue go up and down completely randomly.
Pair Corralation between CiT and Global Blue
Given the investment horizon of 90 days CiT is expected to generate 1.07 times less return on investment than Global Blue. But when comparing it to its historical volatility, CiT Inc is 1.04 times less risky than Global Blue. It trades about 0.03 of its potential returns per unit of risk. Global Blue Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 503.00 in Global Blue Group on August 28, 2024 and sell it today you would earn a total of 59.00 from holding Global Blue Group or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CiT Inc vs. Global Blue Group
Performance |
| Timeline |
| CiT Inc |
| Global Blue Group |
CiT and Global Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CiT and Global Blue
The main advantage of trading using opposite CiT and Global Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CiT position performs unexpectedly, Global Blue 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 Global Blue will offset losses from the drop in Global Blue's long position.| CiT vs. Global Blue Group | CiT vs. EverCommerce | CiT vs. CSG Systems International | CiT vs. Consensus Cloud Solutions |
| Global Blue vs. Evertec | Global Blue vs. Consensus Cloud Solutions | Global Blue vs. CSG Systems International | Global Blue vs. EverCommerce |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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