Correlation Between Grid Dynamics and Thoughtworks Holding
Can any of the company-specific risk be diversified away by investing in both Grid Dynamics and Thoughtworks Holding 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 Thoughtworks Holding 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 Thoughtworks Holding, you can compare the effects of market volatilities on Grid Dynamics and Thoughtworks Holding 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 Thoughtworks Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grid Dynamics and Thoughtworks Holding.
Diversification Opportunities for Grid Dynamics and Thoughtworks Holding
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grid and Thoughtworks is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Grid Dynamics Holdings and Thoughtworks Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thoughtworks Holding 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 Thoughtworks Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thoughtworks Holding has no effect on the direction of Grid Dynamics i.e., Grid Dynamics and Thoughtworks Holding go up and down completely randomly.
Pair Corralation between Grid Dynamics and Thoughtworks Holding
Given the investment horizon of 90 days Grid Dynamics Holdings is expected to generate 0.8 times more return on investment than Thoughtworks Holding. However, Grid Dynamics Holdings is 1.26 times less risky than Thoughtworks Holding. It trades about 0.04 of its potential returns per unit of risk. Thoughtworks Holding is currently generating about -0.02 per unit of risk. If you would invest 1,184 in Grid Dynamics Holdings on August 24, 2024 and sell it today you would earn a total of 587.00 from holding Grid Dynamics Holdings or generate 49.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Grid Dynamics Holdings vs. Thoughtworks Holding
Performance |
| Timeline |
| Grid Dynamics Holdings |
| Thoughtworks Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Grid Dynamics and Thoughtworks Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grid Dynamics and Thoughtworks Holding
The main advantage of trading using opposite Grid Dynamics and Thoughtworks Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grid Dynamics position performs unexpectedly, Thoughtworks Holding 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 Thoughtworks Holding will offset losses from the drop in Thoughtworks Holding's long position.| Grid Dynamics vs. ExlService Holdings | Grid Dynamics vs. ASGN Inc | Grid Dynamics vs. WNS Holdings | Grid Dynamics vs. Gartner |
| Thoughtworks Holding vs. ExlService Holdings | Thoughtworks Holding vs. Genpact Limited | Thoughtworks Holding vs. ASGN Inc | Thoughtworks Holding vs. TTEC 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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