Correlation Between Global Blue and Affirm Holdings
Can any of the company-specific risk be diversified away by investing in both Global Blue and Affirm Holdings 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 Global Blue and Affirm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Blue Group and Affirm Holdings, you can compare the effects of market volatilities on Global Blue and Affirm Holdings 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 Global Blue with a short position of Affirm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Blue and Affirm Holdings.
Diversification Opportunities for Global Blue and Affirm Holdings
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Affirm is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Affirm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affirm Holdings and Global Blue 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 Global Blue Group are associated (or correlated) with Affirm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affirm Holdings has no effect on the direction of Global Blue i.e., Global Blue and Affirm Holdings go up and down completely randomly.
Pair Corralation between Global Blue and Affirm Holdings
Allowing for the 90-day total investment horizon Global Blue is expected to generate 1.46 times less return on investment than Affirm Holdings. In addition to that, Global Blue is 1.08 times more volatile than Affirm Holdings. It trades about 0.11 of its total potential returns per unit of risk. Affirm Holdings is currently generating about 0.18 per unit of volatility. If you would invest 5,759 in Affirm Holdings on September 12, 2024 and sell it today you would earn a total of 873.00 from holding Affirm Holdings or generate 15.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Blue Group vs. Affirm Holdings
Performance |
| Timeline |
| Global Blue Group |
| Affirm Holdings |
Global Blue and Affirm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Blue and Affirm Holdings
The main advantage of trading using opposite Global Blue and Affirm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue position performs unexpectedly, Affirm Holdings 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 Affirm Holdings will offset losses from the drop in Affirm Holdings' long position.| Global Blue vs. GigaCloud Technology Class | Global Blue vs. Alarum Technologies | Global Blue vs. Stem Inc | Global Blue vs. Pagaya Technologies |
| Affirm Holdings vs. CSG Systems International | Affirm Holdings vs. VeriSign | Affirm Holdings vs. Consensus Cloud Solutions | Affirm Holdings vs. Global Blue Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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