Correlation Between Kamada and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both Kamada and Emergent Biosolutions 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 Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and Emergent Biosolutions, you can compare the effects of market volatilities on Kamada and Emergent Biosolutions 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 Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Emergent Biosolutions.
Diversification Opportunities for Kamada and Emergent Biosolutions
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kamada and Emergent is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions 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 Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Kamada i.e., Kamada and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between Kamada and Emergent Biosolutions
Given the investment horizon of 90 days Kamada is expected to generate 7.58 times less return on investment than Emergent Biosolutions. But when comparing it to its historical volatility, Kamada is 4.08 times less risky than Emergent Biosolutions. It trades about 0.05 of its potential returns per unit of risk. Emergent Biosolutions is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 556.00 in Emergent Biosolutions on September 2, 2024 and sell it today you would earn a total of 456.00 from holding Emergent Biosolutions or generate 82.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamada vs. Emergent Biosolutions
Performance |
| Timeline |
| Kamada |
| Emergent Biosolutions |
Kamada and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamada and Emergent Biosolutions
The main advantage of trading using opposite Kamada and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| Kamada vs. Lifecore Biomedical | Kamada vs. Shuttle Pharmaceuticals | Kamada vs. Cumberland Pharmaceuticals | Kamada vs. Ironwood Pharmaceuticals |
| Emergent Biosolutions vs. Zoetis Inc | Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Akanda Corp |
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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