Correlation Between Kyndryl Holdings and Climb Global

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

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

Diversification Opportunities for Kyndryl Holdings and Climb Global

0.52

Correlation Coefficient

Kyndryl Holdings  Climb Global

Very weak diversification

The 3 months correlation between Kyndryl and Climb is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Climb Global Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Climb Global Solutions 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 Climb Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Climb Global Solutions has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Climb Global go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Climb Global

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 0.95 times more return on investment than Climb Global. However, Kyndryl Holdings is 1.05 times less risky than Climb Global. It trades about -0.03 of its potential returns per unit of risk. Climb Global Solutions is currently generating about -0.07 per unit of risk. 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	Weak
Accuracy	100.0%
Values	Daily Returns

Kyndryl Holdings  vs.  Climb Global Solutions

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.

Climb Global Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Climb Global Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kyndryl Holdings and Climb Global

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

The idea behind Kyndryl Holdings and Climb Global Solutions 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.