Correlation Between Global Blue and Couchbase

Can any of the company-specific risk be diversified away by investing in both Global Blue and Couchbase 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 Couchbase 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 Couchbase, you can compare the effects of market volatilities on Global Blue and Couchbase 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 Couchbase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Blue and Couchbase.

Diversification Opportunities for Global Blue and Couchbase

-0.54

Correlation Coefficient

Global Blue  Couchbase

Excellent diversification

The 3 months correlation between Global and Couchbase is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Couchbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Couchbase 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 Couchbase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Couchbase has no effect on the direction of Global Blue i.e., Global Blue and Couchbase go up and down completely randomly.

Pair Corralation between Global Blue and Couchbase

Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 0.88 times more return on investment than Couchbase. However, Global Blue Group is 1.13 times less risky than Couchbase. It trades about 0.06 of its potential returns per unit of risk. Couchbase is currently generating about 0.03 per unit of risk. If you would invest  675.00  in Global Blue Group on December 28, 2024 and sell it today you would earn a total of  61.00  from holding Global Blue Group or generate 9.04% return on investment over 90 days.

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

Global Blue Group  vs.  Couchbase

Global Blue Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Global Blue may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Couchbase

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Couchbase are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Couchbase is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Global Blue and Couchbase

The main advantage of trading using opposite Global Blue and Couchbase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue position performs unexpectedly, Couchbase 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 Couchbase will offset losses from the drop in Couchbase's long position.

The idea behind Global Blue Group and Couchbase 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.