Correlation Between Kamada and PCB Tec
Can any of the company-specific risk be diversified away by investing in both Kamada and PCB Tec 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 PCB Tec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and PCB Tec, you can compare the effects of market volatilities on Kamada and PCB Tec 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 PCB Tec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and PCB Tec.
Diversification Opportunities for Kamada and PCB Tec
Very poor diversification
The 3 months correlation between Kamada and PCB is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and PCB Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCB Tec 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 PCB Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCB Tec has no effect on the direction of Kamada i.e., Kamada and PCB Tec go up and down completely randomly.
Pair Corralation between Kamada and PCB Tec
Assuming the 90 days trading horizon Kamada is expected to generate 1.25 times less return on investment than PCB Tec. In addition to that, Kamada is 4.28 times more volatile than PCB Tec. It trades about 0.06 of its total potential returns per unit of risk. PCB Tec is currently generating about 0.3 per unit of volatility. If you would invest 83,200 in PCB Tec on November 27, 2024 and sell it today you would earn a total of 6,420 from holding PCB Tec or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamada vs. PCB Tec
Performance |
| Timeline |
| Kamada |
| PCB Tec |
Kamada and PCB Tec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamada and PCB Tec
The main advantage of trading using opposite Kamada and PCB Tec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, PCB Tec 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 PCB Tec will offset losses from the drop in PCB Tec's long position.| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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