Correlation Between Global Blue and CiT

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

Diversification Opportunities for Global Blue and CiT

-0.15

Correlation Coefficient

Global Blue  CiT

Good diversification

The 3 months correlation between Global and CiT is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and CiT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CiT Inc 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 CiT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CiT Inc has no effect on the direction of Global Blue i.e., Global Blue and CiT go up and down completely randomly.

Pair Corralation between Global Blue and CiT

Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 1.52 times more return on investment than CiT. However, Global Blue is 1.52 times more volatile than CiT Inc. It trades about 0.1 of its potential returns per unit of risk. CiT Inc is currently generating about 0.07 per unit of risk. If you would invest  615.00  in Global Blue Group on November 28, 2024 and sell it today you would earn a total of  117.00  from holding Global Blue Group or generate 19.02% return on investment over 90 days.

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

Global Blue Group  vs.  CiT Inc

Global Blue Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Global Blue sustained solid returns over the last few months and may actually be approaching a breakup point.

CiT Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CiT Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CiT may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Global Blue and CiT

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

The idea behind Global Blue Group and CiT Inc 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.