Correlation Between Concentrix and Kyndryl Holdings

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

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

Diversification Opportunities for Concentrix and Kyndryl Holdings

-0.52

Correlation Coefficient

Concentrix  Kyndryl Holdings

Excellent diversification

The 3 months correlation between Concentrix and Kyndryl is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Concentrix and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Concentrix 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 Concentrix 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 Concentrix i.e., Concentrix and Kyndryl Holdings go up and down completely randomly.

Pair Corralation between Concentrix and Kyndryl Holdings

Given the investment horizon of 90 days Concentrix is expected to under-perform the Kyndryl Holdings. In addition to that, Concentrix is 1.21 times more volatile than Kyndryl Holdings. It trades about -0.21 of its total potential returns per unit of risk. Kyndryl Holdings is currently generating about 0.22 per unit of volatility. If you would invest  2,369  in Kyndryl Holdings on August 30, 2024 and sell it today you would earn a total of  1,113  from holding Kyndryl Holdings or generate 46.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Concentrix  vs.  Kyndryl Holdings

Concentrix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concentrix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kyndryl Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kyndryl Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Kyndryl Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concentrix and Kyndryl Holdings

The main advantage of trading using opposite Concentrix and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concentrix 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 Concentrix 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.