Correlation Between Globant SA and Kyndryl Holdings

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

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

Diversification Opportunities for Globant SA and Kyndryl Holdings

0.61

Correlation Coefficient

Globant SA  Kyndryl Holdings

Poor diversification

The 3 months correlation between Globant and Kyndryl is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Globant SA and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Globant SA 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 Globant SA 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 Globant SA i.e., Globant SA and Kyndryl Holdings go up and down completely randomly.

Pair Corralation between Globant SA and Kyndryl Holdings

Given the investment horizon of 90 days Globant SA is expected to under-perform the Kyndryl Holdings. In addition to that, Globant SA is 1.56 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 -0.05 per unit of volatility. If you would invest  3,453  in Kyndryl Holdings on December 29, 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

Globant SA  vs.  Kyndryl Holdings

Globant SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globant SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 Globant SA and Kyndryl Holdings

The main advantage of trading using opposite Globant SA and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globant SA 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 Globant SA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.