Correlation Between Global Blue and Microsoft
Can any of the company-specific risk be diversified away by investing in both Global Blue and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on Global Blue and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Blue and Microsoft.
Diversification Opportunities for Global Blue and Microsoft
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Microsoft is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Global Blue i.e., Global Blue and Microsoft go up and down completely randomly.
Pair Corralation between Global Blue and Microsoft
Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 1.64 times more return on investment than Microsoft. However, Global Blue is 1.64 times more volatile than Microsoft. It trades about 0.04 of its potential returns per unit of risk. Microsoft is currently generating about -0.07 per unit of risk. If you would invest 540.00 in Global Blue Group on August 23, 2024 and sell it today you would earn a total of 17.00 from holding Global Blue Group or generate 3.15% 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. Microsoft
Performance |
| Timeline |
| Global Blue Group |
| Microsoft |
Global Blue and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Blue and Microsoft
The main advantage of trading using opposite Global Blue and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Global Blue vs. SentinelOne | Global Blue vs. BlackBerry | Global Blue vs. Zscaler | Global Blue vs. DigitalOcean Holdings |
| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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