Correlation Between Grid Dynamics and CLPS

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

Diversification Opportunities for Grid Dynamics and CLPS

0.35

Correlation Coefficient

Grid Dynamics  CLPS

Weak diversification

The 3 months correlation between Grid and CLPS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Grid Dynamics Holdings and CLPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLPS Inc 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 CLPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLPS Inc has no effect on the direction of Grid Dynamics i.e., Grid Dynamics and CLPS go up and down completely randomly.

Pair Corralation between Grid Dynamics and CLPS

Given the investment horizon of 90 days Grid Dynamics Holdings is expected to under-perform the CLPS. But the stock apears to be less risky and, when comparing its historical volatility, Grid Dynamics Holdings is 1.14 times less risky than CLPS. The stock trades about -0.17 of its potential returns per unit of risk. The CLPS Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  113.00  in CLPS Inc on December 27, 2024 and sell it today you would earn a total of  7.74  from holding CLPS Inc or generate 6.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Grid Dynamics Holdings  vs.  CLPS Inc

Grid Dynamics Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grid Dynamics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CLPS Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CLPS Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, CLPS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Grid Dynamics and CLPS

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

The idea behind Grid Dynamics Holdings and CLPS Inc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.