Correlation Between GBT Technologies and Grid Dynamics

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

Diversification Opportunities for GBT Technologies and Grid Dynamics

0.16

Correlation Coefficient

GBT Technologies  Grid Dynamics

Average diversification

The 3 months correlation between GBT and Grid is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding GBT 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 GBT 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 GBT 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 GBT Technologies i.e., GBT Technologies and Grid Dynamics go up and down completely randomly.

Pair Corralation between GBT Technologies and Grid Dynamics

Given the investment horizon of 90 days GBT Technologies is expected to generate 72.73 times more return on investment than Grid Dynamics. However, GBT Technologies is 72.73 times more volatile than Grid Dynamics Holdings. It trades about 0.2 of its potential returns per unit of risk. Grid Dynamics Holdings is currently generating about -0.11 per unit of risk. If you would invest  0.02  in GBT Technologies on December 26, 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	98.36%
Values	Daily Returns

GBT Technologies  vs.  Grid Dynamics Holdings

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.

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.

Pair Trading with GBT Technologies and Grid Dynamics

The main advantage of trading using opposite GBT Technologies and Grid Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBT 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 GBT 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.