Correlation Between Kyndryl Holdings and Oracle

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

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

Diversification Opportunities for Kyndryl Holdings and Oracle

0.54

Correlation Coefficient

Kyndryl Holdings  Oracle

Very weak diversification

The 3 months correlation between Kyndryl and Oracle is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Oracle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oracle 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 Oracle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oracle has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Oracle go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Oracle

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to generate 4.13 times less return on investment than Oracle. But when comparing it to its historical volatility, Kyndryl Holdings is 1.14 times less risky than Oracle. It trades about 0.1 of its potential returns per unit of risk. Oracle is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  14,897  in Oracle on May 3, 2025 and sell it today you would earn a total of  10,480  from holding Oracle or generate 70.35% return on investment over 90 days.

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

Kyndryl Holdings  vs.  Oracle

Kyndryl Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kyndryl Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Kyndryl Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Oracle

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Oracle are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Oracle disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kyndryl Holdings and Oracle

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

The idea behind Kyndryl Holdings and Oracle 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.

Check out your portfolio center.

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.