Correlation Between Kamada and Brainsway
Can any of the company-specific risk be diversified away by investing in both Kamada and Brainsway 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 Kamada and Brainsway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and Brainsway, you can compare the effects of market volatilities on Kamada and Brainsway 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 Kamada with a short position of Brainsway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Brainsway.
Diversification Opportunities for Kamada and Brainsway
Very weak diversification
The 3 months correlation between Kamada and Brainsway is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and Kamada 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 Kamada are associated (or correlated) with Brainsway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainsway has no effect on the direction of Kamada i.e., Kamada and Brainsway go up and down completely randomly.
Pair Corralation between Kamada and Brainsway
Assuming the 90 days trading horizon Kamada is expected to generate 0.56 times more return on investment than Brainsway. However, Kamada is 1.8 times less risky than Brainsway. It trades about -0.08 of its potential returns per unit of risk. Brainsway is currently generating about -0.09 per unit of risk. If you would invest 216,600 in Kamada on September 1, 2024 and sell it today you would lose (6,000) from holding Kamada or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamada vs. Brainsway
Performance |
| Timeline |
| Kamada |
| Brainsway |
Kamada and Brainsway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamada and Brainsway
The main advantage of trading using opposite Kamada and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, Brainsway 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 Brainsway will offset losses from the drop in Brainsway's long position.| Kamada vs. Bezeq Israeli Telecommunication | Kamada vs. Brainsway | Kamada vs. Mivne Real Estate | Kamada vs. Photomyne |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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