Correlation Between Kyndryl Holdings and Marketwise

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

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

Diversification Opportunities for Kyndryl Holdings and Marketwise

0.22

Correlation Coefficient

Kyndryl Holdings  Marketwise

Modest diversification

The 3 months correlation between Kyndryl and Marketwise is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Marketwise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marketwise 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 Marketwise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marketwise has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Marketwise go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Marketwise

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to under-perform the Marketwise. But the stock apears to be less risky and, when comparing its historical volatility, Kyndryl Holdings is 2.39 times less risky than Marketwise. The stock trades about -0.05 of its potential returns per unit of risk. The Marketwise is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  55.00  in Marketwise on December 29, 2024 and sell it today you would lose (5.00) from holding Marketwise or give up 9.09% of portfolio value over 90 days.

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

Kyndryl Holdings  vs.  Marketwise

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 latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Marketwise

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marketwise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Marketwise is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Kyndryl Holdings and Marketwise

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

The idea behind Kyndryl Holdings and Marketwise 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.