Correlation Between Global Blue and Teradyne

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

Diversification Opportunities for Global Blue and Teradyne

-0.46

Correlation Coefficient

Global Blue  Teradyne

Very good diversification

The 3 months correlation between Global and Teradyne is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne 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 Teradyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradyne has no effect on the direction of Global Blue i.e., Global Blue and Teradyne go up and down completely randomly.

Pair Corralation between Global Blue and Teradyne

Allowing for the 90-day total investment horizon Global Blue Group is expected to generate 1.68 times more return on investment than Teradyne. However, Global Blue is 1.68 times more volatile than Teradyne. It trades about 0.1 of its potential returns per unit of risk. Teradyne is currently generating about -0.06 per unit of risk. If you would invest  563.00  in Global Blue Group on August 27, 2024 and sell it today you would earn a total of  33.00  from holding Global Blue Group or generate 5.86% return on investment over 90 days.

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

Global Blue Group  vs.  Teradyne

Global Blue Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Blue Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Global Blue sustained solid returns over the last few months and may actually be approaching a breakup point.

Teradyne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teradyne has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Global Blue and Teradyne

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

The idea behind Global Blue Group and Teradyne 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 the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.