Correlation Between Alarum Technologies and Global Blue

Can any of the company-specific risk be diversified away by investing in both Alarum Technologies and Global Blue 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 Alarum Technologies and Global Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alarum Technologies and Global Blue Group, you can compare the effects of market volatilities on Alarum Technologies and Global Blue 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 Alarum Technologies with a short position of Global Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alarum Technologies and Global Blue.

Diversification Opportunities for Alarum Technologies and Global Blue

-0.08

Correlation Coefficient

Alarum Technologies  Global Blue

Good diversification

The 3 months correlation between Alarum and Global is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Alarum Technologies and Global Blue Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blue Group and Alarum Technologies 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 Alarum Technologies are associated (or correlated) with Global Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blue Group has no effect on the direction of Alarum Technologies i.e., Alarum Technologies and Global Blue go up and down completely randomly.

Pair Corralation between Alarum Technologies and Global Blue

Given the investment horizon of 90 days Alarum Technologies is expected to generate 2.44 times more return on investment than Global Blue. However, Alarum Technologies is 2.44 times more volatile than Global Blue Group. It trades about 0.03 of its potential returns per unit of risk. Global Blue Group is currently generating about 0.03 per unit of risk. If you would invest  1,261  in Alarum Technologies on September 12, 2024 and sell it today you would lose (31.00) from holding Alarum Technologies or give up 2.46% of portfolio value over 90 days.

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

Alarum Technologies  vs.  Global Blue Group

Alarum Technologies

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alarum Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Alarum Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Global Blue Group

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Global Blue may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Alarum Technologies and Global Blue

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

The idea behind Alarum Technologies and Global Blue Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.