Correlation Between Kyndryl Holdings and DANAHER

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

By analyzing existing cross correlation between Kyndryl Holdings and DANAHER P 4375, you can compare the effects of market volatilities on Kyndryl Holdings and DANAHER 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 DANAHER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyndryl Holdings and DANAHER.

Diversification Opportunities for Kyndryl Holdings and DANAHER

-0.45

Correlation Coefficient

Kyndryl Holdings  DANAHER

Very good diversification

The 3 months correlation between Kyndryl and DANAHER is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and DANAHER P 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DANAHER P 4375 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 DANAHER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DANAHER P 4375 has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and DANAHER go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and DANAHER

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 2.05 times more return on investment than DANAHER. However, Kyndryl Holdings is 2.05 times more volatile than DANAHER P 4375. It trades about 0.02 of its potential returns per unit of risk. DANAHER P 4375 is currently generating about -0.02 per unit of risk. If you would invest  3,499  in Kyndryl Holdings on December 24, 2024 and sell it today you would earn a total of  36.00  from holding Kyndryl Holdings or generate 1.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	54.1%
Values	Daily Returns

Kyndryl Holdings  vs.  DANAHER P 4375

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.

DANAHER P 4375

Risk-Adjusted Performance

Very Weak

Over the last 90 days DANAHER P 4375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DANAHER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kyndryl Holdings and DANAHER

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

The idea behind Kyndryl Holdings and DANAHER P 4375 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..