Correlation Between Kamada and Clal Biotechnology
Can any of the company-specific risk be diversified away by investing in both Kamada and Clal Biotechnology 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 Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and Clal Biotechnology Industries, you can compare the effects of market volatilities on Kamada and Clal Biotechnology 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 Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Clal Biotechnology.
Diversification Opportunities for Kamada and Clal Biotechnology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kamada and Clal is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology 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 Clal Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Biotechnology has no effect on the direction of Kamada i.e., Kamada and Clal Biotechnology go up and down completely randomly.
Pair Corralation between Kamada and Clal Biotechnology
Assuming the 90 days trading horizon Kamada is expected to generate 0.7 times more return on investment than Clal Biotechnology. However, Kamada is 1.43 times less risky than Clal Biotechnology. It trades about 0.12 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about -0.01 per unit of risk. If you would invest 198,000 in Kamada on November 3, 2024 and sell it today you would earn a total of 45,500 from holding Kamada or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamada vs. Clal Biotechnology Industries
Performance |
| Timeline |
| Kamada |
| Clal Biotechnology |
Kamada and Clal Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamada and Clal Biotechnology
The main advantage of trading using opposite Kamada and Clal Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, Clal Biotechnology 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 Clal Biotechnology will offset losses from the drop in Clal Biotechnology's long position.| Kamada vs. Kamada | Kamada vs. Teva Pharmaceutical Industries | Kamada vs. Tower Semiconductor | Kamada vs. Elbit Systems |
| Clal Biotechnology vs. Kamada | Clal Biotechnology vs. BioLine RX | Clal Biotechnology vs. Evogene | Clal Biotechnology vs. Bezeq Israeli Telecommunication |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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