Correlation Between Kyndryl Holdings and Guerrilla

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

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

Diversification Opportunities for Kyndryl Holdings and Guerrilla

-0.71

Correlation Coefficient

Kyndryl Holdings  Guerrilla

Pay attention - limited upside

The 3 months correlation between Kyndryl and Guerrilla is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Guerrilla RF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerrilla RF 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 Guerrilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerrilla RF has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Guerrilla go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Guerrilla

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 0.28 times more return on investment than Guerrilla. However, Kyndryl Holdings is 3.58 times less risky than Guerrilla. It trades about 0.34 of its potential returns per unit of risk. Guerrilla RF is currently generating about -0.05 per unit of risk. If you would invest  2,413  in Kyndryl Holdings on October 7, 2024 and sell it today you would earn a total of  1,311  from holding Kyndryl Holdings or generate 54.33% return on investment over 90 days.

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

Kyndryl Holdings  vs.  Guerrilla RF

Kyndryl Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kyndryl Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Kyndryl Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Guerrilla RF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerrilla RF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kyndryl Holdings and Guerrilla

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

The idea behind Kyndryl Holdings and Guerrilla RF 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.