Correlation Between Kyndryl Holdings and Canadian Solar
Can any of the company-specific risk be diversified away by investing in both Kyndryl Holdings and Canadian Solar 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 Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyndryl Holdings and Canadian Solar, you can compare the effects of market volatilities on Kyndryl Holdings and Canadian Solar 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 Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyndryl Holdings and Canadian Solar.
Diversification Opportunities for Kyndryl Holdings and Canadian Solar
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kyndryl and Canadian is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar 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 Canadian Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Solar has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Canadian Solar go up and down completely randomly.
Pair Corralation between Kyndryl Holdings and Canadian Solar
Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 0.74 times more return on investment than Canadian Solar. However, Kyndryl Holdings is 1.34 times less risky than Canadian Solar. It trades about -0.05 of its potential returns per unit of risk. Canadian Solar is currently generating about -0.05 per unit of risk. 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 | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kyndryl Holdings vs. Canadian Solar
Performance |
Timeline |
Kyndryl Holdings |
Canadian Solar |
Kyndryl Holdings and Canadian Solar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kyndryl Holdings and Canadian Solar
The main advantage of trading using opposite Kyndryl Holdings and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyndryl Holdings position performs unexpectedly, Canadian Solar 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 Canadian Solar will offset losses from the drop in Canadian Solar's long position.Kyndryl Holdings vs. Organon Co | Kyndryl Holdings vs. Warner Bros Discovery | Kyndryl Holdings vs. Viatris | Kyndryl Holdings vs. GE HealthCare Technologies |
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Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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