Correlation Between Nayax and Kyndryl Holdings

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

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

Diversification Opportunities for Nayax and Kyndryl Holdings

0.64

Correlation Coefficient

Nayax  Kyndryl Holdings

Poor diversification

The 3 months correlation between Nayax and Kyndryl is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nayax and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Nayax 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 Nayax are associated (or correlated) with Kyndryl Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyndryl Holdings has no effect on the direction of Nayax i.e., Nayax and Kyndryl Holdings go up and down completely randomly.

Pair Corralation between Nayax and Kyndryl Holdings

Given the investment horizon of 90 days Nayax is expected to generate 0.92 times more return on investment than Kyndryl Holdings. However, Nayax is 1.08 times less risky than Kyndryl Holdings. It trades about 0.15 of its potential returns per unit of risk. Kyndryl Holdings is currently generating about -0.03 per unit of risk. If you would invest  2,871  in Nayax on December 28, 2024 and sell it today you would earn a total of  631.00  from holding Nayax or generate 21.98% return on investment over 90 days.

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

Nayax  vs.  Kyndryl Holdings

Nayax

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nayax are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nayax showed solid returns over the last few months and may actually be approaching a breakup point.

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 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.

Pair Trading with Nayax and Kyndryl Holdings

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

The idea behind Nayax and Kyndryl 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.