Correlation Between Gartner and Kyndryl Holdings

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

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

Diversification Opportunities for Gartner and Kyndryl Holdings

0.76

Correlation Coefficient

Gartner  Kyndryl Holdings

Poor diversification

The 3 months correlation between Gartner and Kyndryl is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gartner and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Gartner 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 Gartner 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 Gartner i.e., Gartner and Kyndryl Holdings go up and down completely randomly.

Pair Corralation between Gartner and Kyndryl Holdings

Allowing for the 90-day total investment horizon Gartner is expected to under-perform the Kyndryl Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Gartner is 1.67 times less risky than Kyndryl Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The Kyndryl Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,453  in Kyndryl Holdings on December 28, 2024 and sell it today you would lose (221.00) from holding Kyndryl Holdings or give up 6.4% of portfolio value over 90 days.

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

Gartner  vs.  Kyndryl Holdings

Gartner

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gartner has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 rather sound fundamental indicators, Kyndryl Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gartner and Kyndryl Holdings

The main advantage of trading using opposite Gartner and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gartner 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 Gartner 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.