Correlation Between Kontrol Technologies and Grid Dynamics

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

Diversification Opportunities for Kontrol Technologies and Grid Dynamics

-0.56

Correlation Coefficient

Kontrol Technologies  Grid Dynamics

Excellent diversification

The 3 months correlation between Kontrol and Grid is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kontrol Technologies Corp 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 Kontrol 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 Kontrol Technologies Corp 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 Kontrol Technologies i.e., Kontrol Technologies and Grid Dynamics go up and down completely randomly.

Pair Corralation between Kontrol Technologies and Grid Dynamics

Assuming the 90 days horizon Kontrol Technologies is expected to generate 8.23 times less return on investment than Grid Dynamics. In addition to that, Kontrol Technologies is 2.13 times more volatile than Grid Dynamics Holdings. It trades about 0.0 of its total potential returns per unit of risk. Grid Dynamics Holdings is currently generating about 0.06 per unit of volatility. If you would invest  1,003  in Grid Dynamics Holdings on December 4, 2024 and sell it today you would earn a total of  920.00  from holding Grid Dynamics Holdings or generate 91.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Kontrol Technologies Corp  vs.  Grid Dynamics Holdings

Kontrol Technologies Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kontrol Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Kontrol Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Grid Dynamics Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kontrol Technologies and Grid Dynamics

The main advantage of trading using opposite Kontrol Technologies and Grid Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontrol 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 Kontrol Technologies Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.