Correlation Between Global Blue and Cemtrex

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

Diversification Opportunities for Global Blue and Cemtrex

-0.14

Correlation Coefficient

Global Blue  Cemtrex

Good diversification

The 3 months correlation between Global and Cemtrex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Cemtrex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cemtrex 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 Cemtrex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cemtrex has no effect on the direction of Global Blue i.e., Global Blue and Cemtrex go up and down completely randomly.

Pair Corralation between Global Blue and Cemtrex

Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 0.24 times more return on investment than Cemtrex. However, Global Blue Group is 4.23 times less risky than Cemtrex. It trades about 0.04 of its potential returns per unit of risk. Cemtrex is currently generating about -0.43 per unit of risk. If you would invest  571.00  in Global Blue Group on September 17, 2024 and sell it today you would earn a total of  31.00  from holding Global Blue Group or generate 5.43% 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.  Cemtrex

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.

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.

Pair Trading with Global Blue and Cemtrex

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

The idea behind Global Blue Group and Cemtrex 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.