Correlation Between Kyndryl Holdings and Trident Digital

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

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

Diversification Opportunities for Kyndryl Holdings and Trident Digital

-0.11

Correlation Coefficient

Kyndryl Holdings  Trident Digital

Good diversification

The 3 months correlation between Kyndryl and Trident is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Trident Digital Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trident Digital Tech 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 Trident Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trident Digital Tech has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Trident Digital go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Trident Digital

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 0.17 times more return on investment than Trident Digital. However, Kyndryl Holdings is 5.89 times less risky than Trident Digital. It trades about -0.05 of its potential returns per unit of risk. Trident Digital Tech is currently generating about -0.06 per unit of risk. If you would invest  3,453  in Kyndryl Holdings on December 29, 2024 and sell it today you would lose (321.00) from holding Kyndryl Holdings or give up 9.3% 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.  Trident Digital Tech

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.

Trident Digital Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trident Digital Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kyndryl Holdings and Trident Digital

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

The idea behind Kyndryl Holdings and Trident Digital Tech 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.