Correlation Between BigBearai Holdings and Kyndryl Holdings

Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and Kyndryl Holdings 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 BigBearai Holdings and Kyndryl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BigBearai Holdings and Kyndryl Holdings, you can compare the effects of market volatilities on BigBearai Holdings and Kyndryl Holdings 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 BigBearai Holdings with a short position of Kyndryl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Kyndryl Holdings.

Diversification Opportunities for BigBearai Holdings and Kyndryl Holdings

0.77

Correlation Coefficient

BigBearai Holdings  Kyndryl Holdings

Poor diversification

The 3 months correlation between BigBearai and Kyndryl is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and BigBearai 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 BigBearai Holdings are associated (or correlated) with Kyndryl Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyndryl Holdings has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Kyndryl Holdings go up and down completely randomly.

Pair Corralation between BigBearai Holdings and Kyndryl Holdings

Given the investment horizon of 90 days BigBearai Holdings is expected to under-perform the Kyndryl Holdings. In addition to that, BigBearai Holdings is 4.16 times more volatile than Kyndryl Holdings. It trades about -0.02 of its total potential returns per unit of risk. Kyndryl Holdings is currently generating about -0.05 per unit of volatility. If you would invest  3,453  in Kyndryl Holdings on December 30, 2024 and sell it today you would lose (321.00) from holding Kyndryl Holdings or give up 9.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BigBearai Holdings  vs.  Kyndryl Holdings

BigBearai Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BigBearai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Kyndryl Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kyndryl Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with BigBearai Holdings and Kyndryl Holdings

The main advantage of trading using opposite BigBearai Holdings and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, Kyndryl Holdings 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 Kyndryl Holdings will offset losses from the drop in Kyndryl Holdings' long position.

The idea behind BigBearai Holdings and Kyndryl Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.