Correlation Between DEXUS and Kyndryl Holdings

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

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

Diversification Opportunities for DEXUS and Kyndryl Holdings

0.41

Correlation Coefficient

DEXUS  Kyndryl Holdings

Very weak diversification

The 3 months correlation between DEXUS and Kyndryl is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding DEXUS and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings and DEXUS 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 DEXUS 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 DEXUS i.e., DEXUS and Kyndryl Holdings go up and down completely randomly.

Pair Corralation between DEXUS and Kyndryl Holdings

Assuming the 90 days trading horizon DEXUS is expected to under-perform the Kyndryl Holdings. But the stock apears to be less risky and, when comparing its historical volatility, DEXUS is 1.36 times less risky than Kyndryl Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Kyndryl Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,087  in Kyndryl Holdings on January 24, 2024 and sell it today you would lose (35.00) from holding Kyndryl Holdings or give up 1.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

DEXUS  vs.  Kyndryl Holdings

DEXUS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DEXUS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, DEXUS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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

Pair Trading with DEXUS and Kyndryl Holdings

The main advantage of trading using opposite DEXUS and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DEXUS 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 DEXUS 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.