Correlation Between Grid Dynamics and Cyxtera Technologies

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

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

Diversification Opportunities for Grid Dynamics and Cyxtera Technologies

-0.73

Correlation Coefficient

Grid Dynamics  Cyxtera Technologies

Pay attention - limited upside

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

Pair Corralation between Grid Dynamics and Cyxtera Technologies

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

Grid Dynamics Holdings  vs.  Cyxtera Technologies

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.

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.

Pair Trading with Grid Dynamics and Cyxtera Technologies

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

The idea behind Grid Dynamics Holdings and Cyxtera Technologies 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.