Correlation Between Grid Dynamics and GBT Technologies

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

Diversification Opportunities for Grid Dynamics and GBT Technologies

0.13

Correlation Coefficient

Grid Dynamics  GBT Technologies

Average diversification

The 3 months correlation between Grid and GBT is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Grid Dynamics Holdings and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT 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 GBT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBT Technologies has no effect on the direction of Grid Dynamics i.e., Grid Dynamics and GBT Technologies go up and down completely randomly.

Pair Corralation between Grid Dynamics and GBT Technologies

Given the investment horizon of 90 days Grid Dynamics Holdings is expected to under-perform the GBT Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Grid Dynamics Holdings is 72.74 times less risky than GBT Technologies. The stock trades about -0.11 of its potential returns per unit of risk. The GBT Technologies is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  0.02  in GBT Technologies on December 23, 2024 and sell it today you would lose (0.01) from holding GBT Technologies or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Grid Dynamics Holdings  vs.  GBT Technologies

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.

GBT Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GBT Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, GBT Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grid Dynamics and GBT Technologies

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

The idea behind Grid Dynamics Holdings and GBT 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.