Correlation Between Global Blue and Hub Cyber

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

Diversification Opportunities for Global Blue and Hub Cyber

0.39

Correlation Coefficient

Global Blue  Hub Cyber

Weak diversification

The 3 months correlation between Global and Hub is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Hub Cyber Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Cyber Security 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 Hub Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Cyber Security has no effect on the direction of Global Blue i.e., Global Blue and Hub Cyber go up and down completely randomly.

Pair Corralation between Global Blue and Hub Cyber

Allowing for the 90-day total investment horizon Global Blue is expected to generate 4.37 times less return on investment than Hub Cyber. But when comparing it to its historical volatility, Global Blue Group is 10.3 times less risky than Hub Cyber. It trades about 0.5 of its potential returns per unit of risk. Hub Cyber Security is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Hub Cyber Security on October 6, 2024 and sell it today you would earn a total of  30.00  from holding Hub Cyber Security or generate 63.83% 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.  Hub Cyber Security

Global Blue Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 11 (%) 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.

Hub Cyber Security

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hub Cyber Security are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Hub Cyber exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Blue and Hub Cyber

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

The idea behind Global Blue Group and Hub Cyber Security 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.