Correlation Between Empire State and Kyndryl Holdings
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and Kyndryl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Kyndryl Holdings, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of Kyndryl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Kyndryl Holdings.
Diversification Opportunities for Empire State and Kyndryl Holdings
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Empire and Kyndryl is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Kyndryl Holdings go up and down completely randomly.
Pair Corralation between Empire State and Kyndryl Holdings
Given the investment horizon of 90 days Empire State is expected to generate 12.46 times less return on investment than Kyndryl Holdings. But when comparing it to its historical volatility, Empire State Realty is 3.3 times less risky than Kyndryl Holdings. It trades about 0.13 of its potential returns per unit of risk. Kyndryl Holdings is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 2,289 in Kyndryl Holdings on September 1, 2024 and sell it today you would earn a total of 1,182 from holding Kyndryl Holdings or generate 51.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Kyndryl Holdings
Performance |
| Timeline |
| Empire State Realty |
| Kyndryl Holdings |
Empire State and Kyndryl Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Kyndryl Holdings
The main advantage of trading using opposite Empire State and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Kyndryl Holdings vs. FiscalNote Holdings | Kyndryl Holdings vs. Innodata | Kyndryl Holdings vs. Aurora Innovation | Kyndryl Holdings vs. Conduent |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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