Correlation Between Cyxtera Technologies and Grid Dynamics

Can any of the company-specific risk be diversified away by investing in both Cyxtera Technologies and Grid Dynamics 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 Cyxtera Technologies and Grid Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cyxtera Technologies and Grid Dynamics Holdings, you can compare the effects of market volatilities on Cyxtera Technologies and Grid Dynamics 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 Cyxtera Technologies with a short position of Grid Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyxtera Technologies and Grid Dynamics.

Diversification Opportunities for Cyxtera Technologies and Grid Dynamics

-0.73

Correlation Coefficient

Cyxtera Technologies  Grid Dynamics

Pay attention - limited upside

The 3 months correlation between Cyxtera and Grid is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cyxtera Technologies and Grid Dynamics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Dynamics Holdings and Cyxtera Technologies 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 Cyxtera Technologies are associated (or correlated) with Grid Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Dynamics Holdings has no effect on the direction of Cyxtera Technologies i.e., Cyxtera Technologies and Grid Dynamics go up and down completely randomly.

Pair Corralation between Cyxtera Technologies and Grid Dynamics

If you would invest  1,346  in Grid Dynamics Holdings on September 3, 2024 and sell it today you would earn a total of  484.00  from holding Grid Dynamics Holdings or generate 35.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Cyxtera Technologies  vs.  Grid Dynamics Holdings

Cyxtera Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyxtera Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cyxtera Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Grid Dynamics Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grid Dynamics Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Grid Dynamics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cyxtera Technologies and Grid Dynamics

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

The idea behind Cyxtera Technologies and Grid Dynamics 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.