Correlation Between B Communications and Kamada
Can any of the company-specific risk be diversified away by investing in both B Communications and Kamada 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 B Communications and Kamada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Communications and Kamada, you can compare the effects of market volatilities on B Communications and Kamada 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 B Communications with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Kamada.
Diversification Opportunities for B Communications and Kamada
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BCOM and Kamada is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and B Communications 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 B Communications are associated (or correlated) with Kamada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamada has no effect on the direction of B Communications i.e., B Communications and Kamada go up and down completely randomly.
Pair Corralation between B Communications and Kamada
Assuming the 90 days trading horizon B Communications is expected to under-perform the Kamada. But the stock apears to be less risky and, when comparing its historical volatility, B Communications is 2.94 times less risky than Kamada. The stock trades about -0.02 of its potential returns per unit of risk. The Kamada is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 265,100 in Kamada on December 11, 2024 and sell it today you would lose (6,300) from holding Kamada or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Communications vs. Kamada
Performance |
| Timeline |
| B Communications |
| Kamada |
B Communications and Kamada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Communications and Kamada
The main advantage of trading using opposite B Communications and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Communications position performs unexpectedly, Kamada 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 Kamada will offset losses from the drop in Kamada's long position.| B Communications vs. Bezeq Israeli Telecommunication | B Communications vs. Partner | B Communications vs. Cellcom Israel | B Communications vs. Tower Semiconductor |
| Kamada vs. Kamada | Kamada vs. Teva Pharmaceutical Industries | Kamada vs. Tower Semiconductor | Kamada vs. Elbit Systems |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |