Correlation Between Global Blue and Liveramp Holdings

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

Diversification Opportunities for Global Blue and Liveramp Holdings

0.7

Correlation Coefficient

Global Blue  Liveramp Holdings

Poor diversification

The 3 months correlation between Global and Liveramp is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Liveramp Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liveramp Holdings 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 Liveramp Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liveramp Holdings has no effect on the direction of Global Blue i.e., Global Blue and Liveramp Holdings go up and down completely randomly.

Pair Corralation between Global Blue and Liveramp Holdings

Allowing for the 90-day total investment horizon Global Blue is expected to generate 1.16 times less return on investment than Liveramp Holdings. In addition to that, Global Blue is 2.45 times more volatile than Liveramp Holdings. It trades about 0.12 of its total potential returns per unit of risk. Liveramp Holdings is currently generating about 0.34 per unit of volatility. If you would invest  2,849  in Liveramp Holdings on September 13, 2024 and sell it today you would earn a total of  384.00  from holding Liveramp Holdings or generate 13.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Global Blue Group  vs.  Liveramp Holdings

Global Blue Group

Risk-Adjusted Performance

4 of 100

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 unsteady fundamental drivers, Global Blue may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Liveramp Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liveramp Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Liveramp Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Blue and Liveramp Holdings

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

The idea behind Global Blue Group and Liveramp Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .