Correlation Between Kyndryl Holdings and Digital China
Can any of the company-specific risk be diversified away by investing in both Kyndryl Holdings and Digital China 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 Digital China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyndryl Holdings and Digital China Holdings, you can compare the effects of market volatilities on Kyndryl Holdings and Digital China 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 Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyndryl Holdings and Digital China.
Diversification Opportunities for Kyndryl Holdings and Digital China
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kyndryl and Digital is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Digital China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Holdings 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 Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Holdings has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Digital China go up and down completely randomly.
Pair Corralation between Kyndryl Holdings and Digital China
Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 0.7 times more return on investment than Digital China. However, Kyndryl Holdings is 1.42 times less risky than Digital China. It trades about 0.09 of its potential returns per unit of risk. Digital China Holdings is currently generating about 0.01 per unit of risk. If you would invest 1,095 in Kyndryl Holdings on August 27, 2024 and sell it today you would earn a total of 2,210 from holding Kyndryl Holdings or generate 201.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Kyndryl Holdings vs. Digital China Holdings
Performance |
| Timeline |
| Kyndryl Holdings |
| Digital China Holdings |
Kyndryl Holdings and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyndryl Holdings and Digital China
The main advantage of trading using opposite Kyndryl Holdings and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyndryl Holdings position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Kyndryl Holdings vs. Data Storage Corp | Kyndryl Holdings vs. Usio Inc | Kyndryl Holdings vs. ARB IOT Group | Kyndryl Holdings vs. FiscalNote Holdings |
| Digital China vs. Kyndryl Holdings | Digital China vs. Accenture plc | Digital China vs. BigBearai Holdings | Digital China vs. Xerox Corp |
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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