Correlation Between Microsoft and Grid Dynamics
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and Grid Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Grid Dynamics Holdings, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of Grid Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Grid Dynamics.
Diversification Opportunities for Microsoft and Grid Dynamics
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Microsoft and Grid is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft 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 Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and Grid Dynamics go up and down completely randomly.
Pair Corralation between Microsoft and Grid Dynamics
Given the investment horizon of 90 days Microsoft is expected to generate 0.3 times more return on investment than Grid Dynamics. However, Microsoft is 3.33 times less risky than Grid Dynamics. It trades about 0.17 of its potential returns per unit of risk. Grid Dynamics Holdings is currently generating about -0.22 per unit of risk. If you would invest 45,793 in Microsoft on May 29, 2025 and sell it today you would earn a total of 4,633 from holding Microsoft or generate 10.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Grid Dynamics Holdings
Performance |
| Timeline |
| Microsoft |
| Grid Dynamics Holdings |
Microsoft and Grid Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Grid Dynamics
The main advantage of trading using opposite Microsoft and Grid Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palantir Technologies Class | Microsoft vs. Crowdstrike Holdings | Microsoft vs. Oracle | Microsoft vs. CoreWeave, Class A |
| Grid Dynamics vs. The Hackett Group | Grid Dynamics vs. Genpact Limited | Grid Dynamics vs. N Able Inc | Grid Dynamics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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