Correlation Between Nextage Therapeutics and Kamada
Can any of the company-specific risk be diversified away by investing in both Nextage Therapeutics and Kamada 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 Nextage Therapeutics and Kamada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextage Therapeutics and Kamada, you can compare the effects of market volatilities on Nextage Therapeutics and Kamada 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 Nextage Therapeutics with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextage Therapeutics and Kamada.
Diversification Opportunities for Nextage Therapeutics and Kamada
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nextage and Kamada is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nextage Therapeutics and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Nextage Therapeutics 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 Nextage Therapeutics are associated (or correlated) with Kamada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamada has no effect on the direction of Nextage Therapeutics i.e., Nextage Therapeutics and Kamada go up and down completely randomly.
Pair Corralation between Nextage Therapeutics and Kamada
Assuming the 90 days trading horizon Nextage Therapeutics is expected to generate 2.65 times more return on investment than Kamada. However, Nextage Therapeutics is 2.65 times more volatile than Kamada. It trades about 0.11 of its potential returns per unit of risk. Kamada is currently generating about -0.08 per unit of risk. If you would invest 6,720 in Nextage Therapeutics on September 1, 2024 and sell it today you would earn a total of 480.00 from holding Nextage Therapeutics or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextage Therapeutics vs. Kamada
Performance |
| Timeline |
| Nextage Therapeutics |
| Kamada |
Nextage Therapeutics and Kamada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextage Therapeutics and Kamada
The main advantage of trading using opposite Nextage Therapeutics and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextage Therapeutics position performs unexpectedly, Kamada 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 Kamada will offset losses from the drop in Kamada's long position.| Nextage Therapeutics vs. Electreon Wireless | Nextage Therapeutics vs. Harel Insurance Investments | Nextage Therapeutics vs. Millennium Food Tech LP | Nextage Therapeutics vs. Polyram Plastic Industries |
| Kamada vs. Bezeq Israeli Telecommunication | Kamada vs. Brainsway | Kamada vs. Mivne Real Estate | Kamada vs. Photomyne |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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