Correlation Between Kyndryl Holdings and Grid Dynamics
Can any of the company-specific risk be diversified away by investing in both Kyndryl Holdings and Grid Dynamics 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 Grid Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyndryl Holdings and Grid Dynamics Holdings, you can compare the effects of market volatilities on Kyndryl Holdings and Grid Dynamics 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 Grid Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyndryl Holdings and Grid Dynamics.
Diversification Opportunities for Kyndryl Holdings and Grid Dynamics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyndryl and Grid is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Grid Dynamics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Dynamics 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 Grid Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Dynamics Holdings has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Grid Dynamics go up and down completely randomly.
Pair Corralation between Kyndryl Holdings and Grid Dynamics
Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 1.12 times more return on investment than Grid Dynamics. However, Kyndryl Holdings is 1.12 times more volatile than Grid Dynamics Holdings. It trades about 0.4 of its potential returns per unit of risk. Grid Dynamics Holdings is currently generating about 0.17 per unit of risk. If you would invest 2,377 in Kyndryl Holdings on August 27, 2024 and sell it today you would earn a total of 1,013 from holding Kyndryl Holdings or generate 42.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyndryl Holdings vs. Grid Dynamics Holdings
Performance |
| Timeline |
| Kyndryl Holdings |
| Grid Dynamics Holdings |
Kyndryl Holdings and Grid Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyndryl Holdings and Grid Dynamics
The main advantage of trading using opposite Kyndryl Holdings and Grid Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyndryl Holdings position performs unexpectedly, Grid Dynamics 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 Grid Dynamics will offset losses from the drop in Grid Dynamics' long position.| Kyndryl Holdings vs. Data Storage Corp | Kyndryl Holdings vs. Usio Inc | Kyndryl Holdings vs. ARB IOT Group | Kyndryl Holdings vs. FiscalNote Holdings |
| Grid Dynamics vs. ExlService Holdings | Grid Dynamics vs. ASGN Inc | Grid Dynamics vs. WNS Holdings | Grid Dynamics vs. Gartner |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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