Correlation Between Kyndryl Holdings and Eco Growth

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

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

Diversification Opportunities for Kyndryl Holdings and Eco Growth

0.07

Correlation Coefficient

Kyndryl Holdings  Eco Growth

Significant diversification

The 3 months correlation between Kyndryl and Eco is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Eco Growth Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Growth Strategies 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 Eco Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Growth Strategies has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Eco Growth go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Eco Growth

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 113.85 times less return on investment than Eco Growth. But when comparing it to its historical volatility, Kyndryl Holdings is 11.76 times less risky than Eco Growth. It trades about 0.02 of its potential returns per unit of risk. Eco Growth Strategies is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  3.70  in Eco Growth Strategies on December 19, 2024 and sell it today you would earn a total of  7.30  from holding Eco Growth Strategies or generate 197.3% return on investment over 90 days.

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

Kyndryl Holdings  vs.  Eco Growth Strategies

Kyndryl Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kyndryl Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Kyndryl Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Eco Growth Strategies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Growth Strategies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Eco Growth unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kyndryl Holdings and Eco Growth

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

The idea behind Kyndryl Holdings and Eco Growth Strategies 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.