Correlation Between Kyndryl Holdings and Sofina Société

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

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

Diversification Opportunities for Kyndryl Holdings and Sofina Société

-0.4

Correlation Coefficient

Kyndryl Holdings  Sofina Société

Very good diversification

The 3 months correlation between Kyndryl and Sofina is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme 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 Sofina Société. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Sofina Société go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Sofina Société

If you would invest  2,433  in Kyndryl Holdings on October 22, 2024 and sell it today you would earn a total of  1,393  from holding Kyndryl Holdings or generate 57.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Kyndryl Holdings  vs.  Sofina Socit Anonyme

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 unfluctuating fundamental indicators, Kyndryl Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sofina Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sofina Socit Anonyme has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sofina Société is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kyndryl Holdings and Sofina Société

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

The idea behind Kyndryl Holdings and Sofina Socit Anonyme 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.