Correlation Between Kyndryl Holdings and FiscalNote Holdings

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

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

Diversification Opportunities for Kyndryl Holdings and FiscalNote Holdings

-0.68

Correlation Coefficient

Kyndryl Holdings  FiscalNote Holdings

Excellent diversification

The 3 months correlation between Kyndryl and FiscalNote is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings 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 FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and FiscalNote Holdings

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 0.78 times more return on investment than FiscalNote Holdings. However, Kyndryl Holdings is 1.28 times less risky than FiscalNote Holdings. It trades about 0.23 of its potential returns per unit of risk. FiscalNote Holdings is currently generating about -0.13 per unit of risk. If you would invest  2,280  in Kyndryl Holdings on September 3, 2024 and sell it today you would earn a total of  1,126  from holding Kyndryl Holdings or generate 49.39% 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.  FiscalNote Holdings

Kyndryl Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kyndryl Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Kyndryl Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kyndryl Holdings and FiscalNote Holdings

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

The idea behind Kyndryl Holdings and FiscalNote Holdings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.