Correlation Between Cemtrex and Global Blue

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

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

Diversification Opportunities for Cemtrex and Global Blue

-0.14

Correlation Coefficient

Cemtrex  Global Blue

Good diversification

The 3 months correlation between Cemtrex and Global is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex 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 Cemtrex 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 Cemtrex 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 Cemtrex i.e., Cemtrex and Global Blue go up and down completely randomly.

Pair Corralation between Cemtrex and Global Blue

Given the investment horizon of 90 days Cemtrex is expected to under-perform the Global Blue. In addition to that, Cemtrex is 3.13 times more volatile than Global Blue Group. It trades about -0.14 of its total potential returns per unit of risk. Global Blue Group is currently generating about 0.13 per unit of volatility. If you would invest  546.00  in Global Blue Group on September 17, 2024 and sell it today you would earn a total of  56.00  from holding Global Blue Group or generate 10.26% return on investment over 90 days.

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

Cemtrex  vs.  Global Blue Group

Cemtrex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global Blue Group

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 3 (%) 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.

Pair Trading with Cemtrex and Global Blue

The main advantage of trading using opposite Cemtrex and Global Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtrex 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 Cemtrex 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.