Correlation Between Kyndryl Holdings and CGI
Can any of the company-specific risk be diversified away by investing in both Kyndryl Holdings and CGI 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 CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyndryl Holdings and CGI Inc, you can compare the effects of market volatilities on Kyndryl Holdings and CGI 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 CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyndryl Holdings and CGI.
Diversification Opportunities for Kyndryl Holdings and CGI
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kyndryl and CGI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc 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 CGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGI Inc has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and CGI go up and down completely randomly.
Pair Corralation between Kyndryl Holdings and CGI
Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 2.46 times more return on investment than CGI. However, Kyndryl Holdings is 2.46 times more volatile than CGI Inc. It trades about 0.1 of its potential returns per unit of risk. CGI Inc is currently generating about 0.04 per unit of risk. If you would invest 1,781 in Kyndryl Holdings on August 24, 2024 and sell it today you would earn a total of 1,557 from holding Kyndryl Holdings or generate 87.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyndryl Holdings vs. CGI Inc
Performance |
| Timeline |
| Kyndryl Holdings |
| CGI Inc |
Kyndryl Holdings and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyndryl Holdings and CGI
The main advantage of trading using opposite Kyndryl Holdings and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyndryl Holdings position performs unexpectedly, CGI 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 CGI will offset losses from the drop in CGI's long position.| Kyndryl Holdings vs. Concentrix | Kyndryl Holdings vs. Accenture plc | Kyndryl Holdings vs. International Business Machines | Kyndryl Holdings vs. Cognizant Technology Solutions |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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