Correlation Between Global Blue and Progress Software

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

Diversification Opportunities for Global Blue and Progress Software

0.21

Correlation Coefficient

Global Blue  Progress Software

Modest diversification

The 3 months correlation between Global and Progress is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Progress Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progress Software 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 Progress Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progress Software has no effect on the direction of Global Blue i.e., Global Blue and Progress Software go up and down completely randomly.

Pair Corralation between Global Blue and Progress Software

Allowing for the 90-day total investment horizon Global Blue is expected to generate 2.49 times less return on investment than Progress Software. In addition to that, Global Blue is 1.64 times more volatile than Progress Software. It trades about 0.04 of its total potential returns per unit of risk. Progress Software is currently generating about 0.14 per unit of volatility. If you would invest  5,816  in Progress Software on September 16, 2024 and sell it today you would earn a total of  1,074  from holding Progress Software or generate 18.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Global Blue Group  vs.  Progress Software

Global Blue Group

Risk-Adjusted Performance

2 of 100

Weak

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

Progress Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progress Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Progress Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Blue and Progress Software

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

The idea behind Global Blue Group and Progress Software 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.