Correlation Between Global Blue and Chindata Group

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

Diversification Opportunities for Global Blue and Chindata Group

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Global and Chindata is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Chindata Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chindata Group Holdings 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 Chindata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chindata Group Holdings has no effect on the direction of Global Blue i.e., Global Blue and Chindata Group go up and down completely randomly.

Pair Corralation between Global Blue and Chindata Group

Allowing for the 90-day total investment horizon Global Blue Group is expected to under-perform the Chindata Group. But the stock apears to be less risky and, when comparing its historical volatility, Global Blue Group is 1.06 times less risky than Chindata Group. The stock trades about 0.0 of its potential returns per unit of risk. The Chindata Group Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  685.00  in Chindata Group Holdings on May 15, 2022 and sell it today you would earn a total of  56.00  from holding Chindata Group Holdings or generate 8.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Global Blue Group  vs.  Chindata Group Holdings

 Performance (%) 
       Timeline  
Global Blue Group 
Global Performance
3 of 100
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 conflicting fundamental drivers, Global Blue sustained solid returns over the last few months and may actually be approaching a breakup point.

Global Price Channel

Chindata Group Holdings 
Chindata Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Chindata Group Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Chindata Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Chindata Price Channel

Global Blue and Chindata Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global Blue and Chindata Group

The main advantage of trading using opposite Global Blue and Chindata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blue position performs unexpectedly, Chindata Group 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 Chindata Group will offset losses from the drop in Chindata Group's long position.
The idea behind Global Blue Group and Chindata Group Holdings 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.
Check out your portfolio center. 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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