Correlation Between Global Blue and Repay Holdings

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

Diversification Opportunities for Global Blue and Repay Holdings

-0.38

Correlation Coefficient

Global Blue  Repay Holdings

Very good diversification

The 3 months correlation between Global and Repay is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Repay Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repay Holdings Corp 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 Repay Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repay Holdings Corp has no effect on the direction of Global Blue i.e., Global Blue and Repay Holdings go up and down completely randomly.

Pair Corralation between Global Blue and Repay Holdings

Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 1.22 times more return on investment than Repay Holdings. However, Global Blue is 1.22 times more volatile than Repay Holdings Corp. It trades about 0.06 of its potential returns per unit of risk. Repay Holdings Corp is currently generating about -0.16 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Global Blue Group  vs.  Repay Holdings Corp

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

Repay Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repay Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Global Blue and Repay Holdings

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

The idea behind Global Blue Group and Repay Holdings Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.