Correlation Between Chindata Group and Kyndryl Holdings

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

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

Diversification Opportunities for Chindata Group and Kyndryl Holdings

0.0

Correlation Coefficient

Chindata Group  Kyndryl Holdings

Pay attention - limited upside

The 3 months correlation between Chindata and Kyndryl is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chindata Group Holdings and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and Chindata Group 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 Chindata Group Holdings 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 Chindata Group i.e., Chindata Group and Kyndryl Holdings go up and down completely randomly.

Pair Corralation between Chindata Group and Kyndryl Holdings

If you would invest  845.00  in Chindata Group Holdings on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Chindata Group Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Chindata Group Holdings  vs.  Kyndryl Holdings

Chindata Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chindata Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chindata Group is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Kyndryl Holdings

Risk-Adjusted Performance

0 of 100

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Chindata Group and Kyndryl Holdings

The main advantage of trading using opposite Chindata Group and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chindata Group 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 Chindata Group Holdings 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.