Correlation Between Kyndryl Holdings and Verra Mobility

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

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

Diversification Opportunities for Kyndryl Holdings and Verra Mobility

0.77

Correlation Coefficient

Kyndryl Holdings  Verra Mobility

Poor diversification

The 3 months correlation between Kyndryl and Verra is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kyndryl Holdings and Verra Mobility Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verra Mobility Corp 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 Verra Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verra Mobility Corp has no effect on the direction of Kyndryl Holdings i.e., Kyndryl Holdings and Verra Mobility go up and down completely randomly.

Pair Corralation between Kyndryl Holdings and Verra Mobility

Allowing for the 90-day total investment horizon Kyndryl Holdings is expected to under-perform the Verra Mobility. In addition to that, Kyndryl Holdings is 1.33 times more volatile than Verra Mobility Corp. It trades about -0.44 of its total potential returns per unit of risk. Verra Mobility Corp is currently generating about -0.08 per unit of volatility. If you would invest  2,520  in Verra Mobility Corp on May 6, 2025 and sell it today you would lose (56.00) from holding Verra Mobility Corp or give up 2.22% of portfolio value over 90 days.

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

Kyndryl Holdings  vs.  Verra Mobility Corp

Kyndryl Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kyndryl Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Kyndryl Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Verra Mobility Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Verra Mobility Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Verra Mobility may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Kyndryl Holdings and Verra Mobility

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

The idea behind Kyndryl Holdings and Verra Mobility Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.