Correlation Between Accenture Plc and Kyndryl Holdings
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Kyndryl 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 Accenture Plc and Kyndryl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Kyndryl Holdings, you can compare the effects of market volatilities on Accenture Plc and Kyndryl 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 Accenture Plc with a short position of Kyndryl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Kyndryl Holdings.
Diversification Opportunities for Accenture Plc and Kyndryl Holdings
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Accenture and Kyndryl is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Accenture Plc 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 Accenture plc are associated (or correlated) with Kyndryl Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyndryl Holdings has no effect on the direction of Accenture Plc i.e., Accenture Plc and Kyndryl Holdings go up and down completely randomly.
Pair Corralation between Accenture Plc and Kyndryl Holdings
Considering the 90-day investment horizon Accenture plc is expected to under-perform the Kyndryl Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Accenture plc is 2.63 times less risky than Kyndryl Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The Kyndryl Holdings is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,401 in Kyndryl Holdings on August 24, 2024 and sell it today you would earn a total of 848.00 from holding Kyndryl Holdings or generate 35.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. Kyndryl Holdings
Performance |
| Timeline |
| Accenture plc |
| Kyndryl Holdings |
Accenture Plc and Kyndryl Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Kyndryl Holdings
The main advantage of trading using opposite Accenture Plc and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Kyndryl 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 Kyndryl Holdings will offset losses from the drop in Kyndryl Holdings' long position.| Accenture Plc vs. Globant SA | Accenture Plc vs. Concentrix | Accenture Plc vs. Cognizant Technology Solutions | Accenture Plc vs. CDW Corp |
| Kyndryl Holdings vs. Concentrix | Kyndryl Holdings vs. Gartner | Kyndryl Holdings vs. Accenture plc | Kyndryl Holdings vs. International Business Machines |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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