Correlation Between CyberArk Software and Global Blue

Can any of the company-specific risk be diversified away by investing in both CyberArk Software 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 CyberArk Software and Global Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CyberArk Software and Global Blue Group, you can compare the effects of market volatilities on CyberArk Software 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 CyberArk Software with a short position of Global Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of CyberArk Software and Global Blue.

Diversification Opportunities for CyberArk Software and Global Blue

0.46

Correlation Coefficient

CyberArk Software  Global Blue

Very weak diversification

The 3 months correlation between CyberArk and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software 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 CyberArk Software 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 CyberArk Software 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 CyberArk Software i.e., CyberArk Software and Global Blue go up and down completely randomly.

Pair Corralation between CyberArk Software and Global Blue

Given the investment horizon of 90 days CyberArk Software is expected to generate 0.6 times more return on investment than Global Blue. However, CyberArk Software is 1.67 times less risky than Global Blue. It trades about 0.14 of its potential returns per unit of risk. Global Blue Group is currently generating about 0.04 per unit of risk. If you would invest  27,340  in CyberArk Software on September 14, 2024 and sell it today you would earn a total of  4,814  from holding CyberArk Software or generate 17.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CyberArk Software  vs.  Global Blue Group

CyberArk Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental drivers, CyberArk Software reported solid returns over the last few months and may actually be approaching a breakup point.

Global Blue Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Global Blue may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CyberArk Software and Global Blue

The main advantage of trading using opposite CyberArk Software and Global Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CyberArk Software 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.

The idea behind CyberArk Software and Global Blue Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.