Correlation Between Grid Dynamics and Nayax

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

Diversification Opportunities for Grid Dynamics and Nayax

0.8

Correlation Coefficient

Grid Dynamics  Nayax

Very poor diversification

The 3 months correlation between Grid and Nayax is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Grid Dynamics Holdings and Nayax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nayax 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 Nayax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nayax has no effect on the direction of Grid Dynamics i.e., Grid Dynamics and Nayax go up and down completely randomly.

Pair Corralation between Grid Dynamics and Nayax

Given the investment horizon of 90 days Grid Dynamics Holdings is expected to generate 0.96 times more return on investment than Nayax. However, Grid Dynamics Holdings is 1.04 times less risky than Nayax. It trades about 0.2 of its potential returns per unit of risk. Nayax is currently generating about 0.11 per unit of risk. If you would invest  1,405  in Grid Dynamics Holdings on September 12, 2024 and sell it today you would earn a total of  512.00  from holding Grid Dynamics Holdings or generate 36.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Grid Dynamics Holdings  vs.  Nayax

Grid Dynamics Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grid Dynamics Holdings are ranked lower than 15 (%) 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.

Nayax

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nayax are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nayax showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grid Dynamics and Nayax

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

The idea behind Grid Dynamics Holdings and Nayax 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.