Correlation Between Kamada and Camtek

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Can any of the company-specific risk be diversified away by investing in both Kamada and Camtek 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 Camtek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and Camtek, you can compare the effects of market volatilities on Kamada and Camtek 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 Camtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Camtek.

Diversification Opportunities for Kamada and Camtek

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Kamada and Camtek is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Camtek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camtek 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 Camtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camtek has no effect on the direction of Kamada i.e., Kamada and Camtek go up and down completely randomly.

Pair Corralation between Kamada and Camtek

Assuming the 90 days trading horizon Kamada is expected to generate 1.02 times less return on investment than Camtek. But when comparing it to its historical volatility, Kamada is 1.43 times less risky than Camtek. It trades about 0.45 of its potential returns per unit of risk. Camtek is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  3,040,000  in Camtek on October 21, 2024 and sell it today you would earn a total of  530,000  from holding Camtek or generate 17.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Kamada  vs.  Camtek

 Performance 
       Timeline  
Kamada 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kamada sustained solid returns over the last few months and may actually be approaching a breakup point.
Camtek 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Camtek are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Camtek sustained solid returns over the last few months and may actually be approaching a breakup point.

Kamada and Camtek Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kamada and Camtek

The main advantage of trading using opposite Kamada and Camtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, Camtek 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 Camtek will offset losses from the drop in Camtek's long position.
The idea behind Kamada and Camtek 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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