Correlation Between Kyndryl Holdings and China Mengniu
Can any of the company-specific risk be diversified away by investing in both Kyndryl Holdings and China Mengniu 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 Kyndryl Holdings and China Mengniu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyndryl Holdings and China Mengniu Dairy, you can compare the effects of market volatilities on Kyndryl Holdings and China Mengniu 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 Kyndryl Holdings with a short position of China Mengniu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyndryl Holdings and China Mengniu.
Diversification Opportunities for Kyndryl Holdings and China Mengniu
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kyndryl and China is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and China Mengniu Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mengniu Dairy and Kyndryl Holdings 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 Kyndryl Holdings are associated (or correlated) with China Mengniu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mengniu Dairy has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and China Mengniu go up and down completely randomly.
Pair Corralation between Kyndryl Holdings and China Mengniu
Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 1.22 times more return on investment than China Mengniu. However, Kyndryl Holdings is 1.22 times more volatile than China Mengniu Dairy. It trades about 0.49 of its potential returns per unit of risk. China Mengniu Dairy is currently generating about -0.05 per unit of risk. 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 |
Kyndryl Holdings vs. China Mengniu Dairy
Performance |
| Timeline |
| Kyndryl Holdings |
| China Mengniu Dairy |
Kyndryl Holdings and China Mengniu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyndryl Holdings and China Mengniu
The main advantage of trading using opposite Kyndryl Holdings and China Mengniu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyndryl Holdings position performs unexpectedly, China Mengniu 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 China Mengniu will offset losses from the drop in China Mengniu's long position.| Kyndryl Holdings vs. FiscalNote Holdings | Kyndryl Holdings vs. Innodata | Kyndryl Holdings vs. Aurora Innovation | Kyndryl Holdings vs. Conduent |
| China Mengniu vs. The A2 Milk | China Mengniu vs. Altavoz Entertainment | China Mengniu vs. Artisan Consumer Goods | China Mengniu vs. General Mills |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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