Correlation Between Xerox Corp and Grid Dynamics
Can any of the company-specific risk be diversified away by investing in both Xerox Corp 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 Xerox Corp and Grid Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xerox Corp and Grid Dynamics Holdings, you can compare the effects of market volatilities on Xerox Corp 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 Xerox Corp with a short position of Grid Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xerox Corp and Grid Dynamics.
Diversification Opportunities for Xerox Corp and Grid Dynamics
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xerox and Grid is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Xerox 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 Xerox Corp 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 Xerox 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 Xerox Corp i.e., Xerox Corp and Grid Dynamics go up and down completely randomly.
Pair Corralation between Xerox Corp and Grid Dynamics
Considering the 90-day investment horizon Xerox Corp is expected to under-perform the Grid Dynamics. In addition to that, Xerox Corp is 1.09 times more volatile than Grid Dynamics Holdings. It trades about -0.04 of its total potential returns per unit of risk. Grid Dynamics Holdings is currently generating about 0.22 per unit of volatility. If you would invest 1,035 in Grid Dynamics Holdings on October 7, 2024 and sell it today you would earn a total of 1,156 from holding Grid Dynamics Holdings or generate 111.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xerox Corp vs. Grid Dynamics Holdings
Performance |
Timeline |
Xerox Corp |
Grid Dynamics Holdings |
Xerox Corp and Grid Dynamics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xerox Corp and Grid Dynamics
The main advantage of trading using opposite Xerox Corp and Grid Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xerox Corp 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.Xerox Corp vs. ExlService Holdings | Xerox Corp vs. CSP Inc | Xerox Corp vs. ASGN Inc | Xerox Corp vs. Fiserv Inc |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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