Correlation Between Cloudflare and Global Blue
Can any of the company-specific risk be diversified away by investing in both Cloudflare 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 Cloudflare and Global Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloudflare and Global Blue Group, you can compare the effects of market volatilities on Cloudflare 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 Cloudflare with a short position of Global Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudflare and Global Blue.
Diversification Opportunities for Cloudflare and Global Blue
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cloudflare and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare 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 Cloudflare 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 Cloudflare 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 Cloudflare i.e., Cloudflare and Global Blue go up and down completely randomly.
Pair Corralation between Cloudflare and Global Blue
Considering the 90-day investment horizon Cloudflare is expected to generate 0.61 times more return on investment than Global Blue. However, Cloudflare is 1.65 times less risky than Global Blue. It trades about 0.43 of its potential returns per unit of risk. Global Blue Group is currently generating about 0.18 per unit of risk. If you would invest 9,229 in Cloudflare on September 18, 2024 and sell it today you would earn a total of 2,527 from holding Cloudflare or generate 27.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloudflare vs. Global Blue Group
Performance |
| Timeline |
| Cloudflare |
| Global Blue Group |
Cloudflare and Global Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloudflare and Global Blue
The main advantage of trading using opposite Cloudflare and Global Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudflare 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.| Cloudflare vs. Evertec | Cloudflare vs. NetScout Systems | Cloudflare vs. CSG Systems International | Cloudflare vs. Tenable Holdings |
| Global Blue vs. Evertec | Global Blue vs. NetScout Systems | Global Blue vs. CSG Systems International | Global Blue vs. Tenable Holdings |
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.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |