Correlation Between Kamada and Lachish
Can any of the company-specific risk be diversified away by investing in both Kamada and Lachish 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 Lachish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and Lachish, you can compare the effects of market volatilities on Kamada and Lachish 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 Lachish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Lachish.
Diversification Opportunities for Kamada and Lachish
Excellent diversification
The 3 months correlation between Kamada and Lachish is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Lachish in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lachish 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 Lachish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lachish has no effect on the direction of Kamada i.e., Kamada and Lachish go up and down completely randomly.
Pair Corralation between Kamada and Lachish
Assuming the 90 days trading horizon Kamada is expected to generate 1.02 times more return on investment than Lachish. However, Kamada is 1.02 times more volatile than Lachish. It trades about 0.45 of its potential returns per unit of risk. Lachish is currently generating about 0.04 per unit of risk. If you would invest 221,500 in Kamada on October 21, 2024 and sell it today you would earn a total of 39,000 from holding Kamada or generate 17.61% 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. Lachish
Performance |
| Timeline |
| Kamada |
| Lachish |
Kamada and Lachish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamada and Lachish
The main advantage of trading using opposite Kamada and Lachish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, Lachish 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 Lachish will offset losses from the drop in Lachish's long position.The idea behind Kamada and Lachish 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.| Lachish vs. Harel Insurance Investments | Lachish vs. Azorim Investment Development | Lachish vs. Batm Advanced Communications | Lachish vs. Arad Investment Industrial |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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