Correlation Between Formula Systems and Kyndryl Holdings
Can any of the company-specific risk be diversified away by investing in both Formula Systems 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 Formula Systems and Kyndryl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formula Systems 1985 and Kyndryl Holdings, you can compare the effects of market volatilities on Formula Systems 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 Formula Systems with a short position of Kyndryl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formula Systems and Kyndryl Holdings.
Diversification Opportunities for Formula Systems and Kyndryl Holdings
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Formula and Kyndryl is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Formula Systems 1985 and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Formula Systems 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 Formula Systems 1985 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 Formula Systems i.e., Formula Systems and Kyndryl Holdings go up and down completely randomly.
Pair Corralation between Formula Systems and Kyndryl Holdings
Assuming the 90 days horizon Formula Systems 1985 is expected to generate 1.26 times more return on investment than Kyndryl Holdings. However, Formula Systems is 1.26 times more volatile than Kyndryl Holdings. It trades about 0.12 of its potential returns per unit of risk. Kyndryl Holdings is currently generating about -0.06 per unit of risk. If you would invest 8,746 in Formula Systems 1985 on November 5, 2024 and sell it today you would earn a total of 381.00 from holding Formula Systems 1985 or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formula Systems 1985 vs. Kyndryl Holdings
Performance |
| Timeline |
| Formula Systems 1985 |
| Kyndryl Holdings |
Formula Systems and Kyndryl Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formula Systems and Kyndryl Holdings
The main advantage of trading using opposite Formula Systems and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formula Systems 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.| Formula Systems vs. CSP Inc | Formula Systems vs. Nayax | Formula Systems vs. Information Services Group | Formula Systems vs. The Hackett Group |
| Kyndryl Holdings vs. Organon Co | Kyndryl Holdings vs. Warner Bros Discovery | Kyndryl Holdings vs. Viatris | Kyndryl Holdings vs. GE HealthCare Technologies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |