Correlation Between Kyndryl Holdings and Fulcrum Therapeutics

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

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

Diversification Opportunities for Kyndryl Holdings and Fulcrum Therapeutics

0.12

Correlation Coefficient

Kyndryl Holdings  Fulcrum Therapeutics

Average diversification

The 3 months correlation between Kyndryl and Fulcrum is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Fulcrum Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Therapeutics 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 Fulcrum Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Therapeutics has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Fulcrum Therapeutics go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Fulcrum Therapeutics

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 0.72 times more return on investment than Fulcrum Therapeutics. However, Kyndryl Holdings is 1.38 times less risky than Fulcrum Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Fulcrum Therapeutics is currently generating about -0.19 per unit of risk. If you would invest  3,441  in Kyndryl Holdings on December 21, 2024 and sell it today you would lose (38.00) from holding Kyndryl Holdings or give up 1.1% 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.  Fulcrum Therapeutics

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.

Fulcrum Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fulcrum Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Kyndryl Holdings and Fulcrum Therapeutics

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

The idea behind Kyndryl Holdings and Fulcrum Therapeutics 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.