Correlation Between Global Blue and Nova

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

Diversification Opportunities for Global Blue and Nova

-0.38

Correlation Coefficient

Global Blue  Nova

Very good diversification

The 3 months correlation between Global and Nova is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Blue Group and Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 Nova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova has no effect on the direction of Global Blue i.e., Global Blue and Nova go up and down completely randomly.

Pair Corralation between Global Blue and Nova

Allowing for the 90-day total investment horizon Global Blue Group is expected to under-perform the Nova. But the stock apears to be less risky and, when comparing its historical volatility, Global Blue Group is 7.01 times less risky than Nova. The stock trades about -0.04 of its potential returns per unit of risk. The Nova is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  20,072  in Nova on May 7, 2025 and sell it today you would earn a total of  6,277  from holding Nova or generate 31.27% 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.  Nova

Global Blue Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Global Blue Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Global Blue is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Nova

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nova are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain primary indicators, Nova demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Blue and Nova

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

The idea behind Global Blue Group and Nova 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.