Correlation Between Global Blue and Dropbox
Can any of the company-specific risk be diversified away by investing in both Global Blue and Dropbox 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 Dropbox 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 Dropbox, you can compare the effects of market volatilities on Global Blue and Dropbox 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 Dropbox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Blue and Dropbox.
Diversification Opportunities for Global Blue and Dropbox
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Dropbox is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Dropbox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dropbox 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 Dropbox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dropbox has no effect on the direction of Global Blue i.e., Global Blue and Dropbox go up and down completely randomly.
Pair Corralation between Global Blue and Dropbox
Allowing for the 90-day total investment horizon Global Blue Group is expected to under-perform the Dropbox. In addition to that, Global Blue is 1.92 times more volatile than Dropbox. It trades about -0.5 of its total potential returns per unit of risk. Dropbox is currently generating about 0.39 per unit of volatility. If you would invest 2,974 in Dropbox on November 9, 2024 and sell it today you would earn a total of 246.00 from holding Dropbox or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Blue Group vs. Dropbox
Performance |
| Timeline |
| Global Blue Group |
| Dropbox |
Global Blue and Dropbox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Blue and Dropbox
The main advantage of trading using opposite Global Blue and Dropbox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue position performs unexpectedly, Dropbox 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 Dropbox will offset losses from the drop in Dropbox's long position.| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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