Correlation Between Kyndryl Holdings and MicroCloud Hologram

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

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

Diversification Opportunities for Kyndryl Holdings and MicroCloud Hologram

-0.08

Correlation Coefficient

Kyndryl Holdings  MicroCloud Hologram

Good diversification

The 3 months correlation between Kyndryl and MicroCloud is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and MicroCloud Hologram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroCloud Hologram 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 MicroCloud Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroCloud Hologram has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and MicroCloud Hologram go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and MicroCloud Hologram

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 40.82 times less return on investment than MicroCloud Hologram. But when comparing it to its historical volatility, Kyndryl Holdings is 10.14 times less risky than MicroCloud Hologram. It trades about 0.02 of its potential returns per unit of risk. MicroCloud Hologram is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  130.00  in MicroCloud Hologram on December 22, 2024 and sell it today you would lose (30.00) from holding MicroCloud Hologram or give up 23.08% of portfolio value over 90 days.

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

Kyndryl Holdings  vs.  MicroCloud Hologram

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

MicroCloud Hologram

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MicroCloud Hologram are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, MicroCloud Hologram displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kyndryl Holdings and MicroCloud Hologram

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

The idea behind Kyndryl Holdings and MicroCloud Hologram 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 Global Correlations module to find global opportunities by holding instruments from different markets.