Correlation Between Kamada and Unitronics
Can any of the company-specific risk be diversified away by investing in both Kamada and Unitronics 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 Unitronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and Unitronics, you can compare the effects of market volatilities on Kamada and Unitronics 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 Unitronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Unitronics.
Diversification Opportunities for Kamada and Unitronics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kamada and Unitronics is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Unitronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitronics 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 Unitronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitronics has no effect on the direction of Kamada i.e., Kamada and Unitronics go up and down completely randomly.
Pair Corralation between Kamada and Unitronics
Assuming the 90 days trading horizon Kamada is expected to generate 1.99 times less return on investment than Unitronics. In addition to that, Kamada is 1.12 times more volatile than Unitronics. It trades about 0.08 of its total potential returns per unit of risk. Unitronics is currently generating about 0.19 per unit of volatility. If you would invest 283,900 in Unitronics on August 29, 2024 and sell it today you would earn a total of 18,600 from holding Unitronics or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Kamada vs. Unitronics
Performance |
| Timeline |
| Kamada |
| Unitronics |
Kamada and Unitronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamada and Unitronics
The main advantage of trading using opposite Kamada and Unitronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, Unitronics 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 Unitronics will offset losses from the drop in Unitronics' 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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