Correlation Between Grid Dynamics and Leidos Holdings
Can any of the company-specific risk be diversified away by investing in both Grid Dynamics and Leidos Holdings 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 Leidos Holdings 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 Leidos Holdings, you can compare the effects of market volatilities on Grid Dynamics and Leidos Holdings 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 Leidos Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grid Dynamics and Leidos Holdings.
Diversification Opportunities for Grid Dynamics and Leidos Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grid and Leidos is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Grid Dynamics Holdings and Leidos Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leidos Holdings 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 Leidos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leidos Holdings has no effect on the direction of Grid Dynamics i.e., Grid Dynamics and Leidos Holdings go up and down completely randomly.
Pair Corralation between Grid Dynamics and Leidos Holdings
Given the investment horizon of 90 days Grid Dynamics Holdings is expected to generate 1.56 times more return on investment than Leidos Holdings. However, Grid Dynamics is 1.56 times more volatile than Leidos Holdings. It trades about 0.07 of its potential returns per unit of risk. Leidos Holdings is currently generating about 0.09 per unit of risk. If you would invest 1,349 in Grid Dynamics Holdings on August 27, 2024 and sell it today you would earn a total of 477.00 from holding Grid Dynamics Holdings or generate 35.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grid Dynamics Holdings vs. Leidos Holdings
Performance |
| Timeline |
| Grid Dynamics Holdings |
| Leidos Holdings |
Grid Dynamics and Leidos Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grid Dynamics and Leidos Holdings
The main advantage of trading using opposite Grid Dynamics and Leidos Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grid Dynamics position performs unexpectedly, Leidos Holdings 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 Leidos Holdings will offset losses from the drop in Leidos Holdings' long position.| Grid Dynamics vs. ExlService Holdings | Grid Dynamics vs. ASGN Inc | Grid Dynamics vs. WNS Holdings | Grid Dynamics vs. Gartner |
| Leidos Holdings vs. CACI International | Leidos Holdings vs. Parsons Corp | Leidos Holdings vs. ASGN Inc | Leidos Holdings vs. ExlService Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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