Correlation Between Global Blue and Gen Digital
Can any of the company-specific risk be diversified away by investing in both Global Blue and Gen Digital 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 Gen Digital 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 Gen Digital, you can compare the effects of market volatilities on Global Blue and Gen Digital 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 Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Blue and Gen Digital.
Diversification Opportunities for Global Blue and Gen Digital
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Gen is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of Global Blue i.e., Global Blue and Gen Digital go up and down completely randomly.
Pair Corralation between Global Blue and Gen Digital
Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 2.54 times more return on investment than Gen Digital. However, Global Blue is 2.54 times more volatile than Gen Digital. It trades about 0.13 of its potential returns per unit of risk. Gen Digital is currently generating about -0.01 per unit of risk. If you would invest 564.00 in Global Blue Group on November 1, 2024 and sell it today you would earn a total of 143.00 from holding Global Blue Group or generate 25.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Blue Group vs. Gen Digital
Performance |
| Timeline |
| Global Blue Group |
| Gen Digital |
Global Blue and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Blue and Gen Digital
The main advantage of trading using opposite Global Blue and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital's long position.| Global Blue vs. Evertec | Global Blue vs. Consensus Cloud Solutions | Global Blue vs. CSG Systems International | Global Blue vs. EverCommerce |
| Gen Digital vs. Wex Inc | Gen Digital vs. CSG Systems International | Gen Digital vs. VeriSign | Gen Digital 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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