Correlation Between Kyndryl Holdings and Hackett
Can any of the company-specific risk be diversified away by investing in both Kyndryl Holdings and Hackett 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 Hackett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyndryl Holdings and The Hackett Group, you can compare the effects of market volatilities on Kyndryl Holdings and Hackett 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 Hackett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyndryl Holdings and Hackett.
Diversification Opportunities for Kyndryl Holdings and Hackett
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kyndryl and Hackett is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and The Hackett Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hackett Group 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 Hackett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hackett Group has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Hackett go up and down completely randomly.
Pair Corralation between Kyndryl Holdings and Hackett
Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 1.7 times more return on investment than Hackett. However, Kyndryl Holdings is 1.7 times more volatile than The Hackett Group. It trades about 0.08 of its potential returns per unit of risk. The Hackett Group is currently generating about 0.07 per unit of risk. If you would invest 1,518 in Kyndryl Holdings on November 28, 2024 and sell it today you would earn a total of 2,344 from holding Kyndryl Holdings or generate 154.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyndryl Holdings vs. The Hackett Group
Performance |
| Timeline |
| Kyndryl Holdings |
| Hackett Group |
Kyndryl Holdings and Hackett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyndryl Holdings and Hackett
The main advantage of trading using opposite Kyndryl Holdings and Hackett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyndryl Holdings position performs unexpectedly, Hackett 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 Hackett will offset losses from the drop in Hackett's long position.| Kyndryl Holdings vs. Organon Co | Kyndryl Holdings vs. Warner Bros Discovery | Kyndryl Holdings vs. Viatris | Kyndryl Holdings vs. GE HealthCare Technologies |
| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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