Correlation Between PCB Tec and Kamada
Can any of the company-specific risk be diversified away by investing in both PCB Tec 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 PCB Tec and Kamada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PCB Tec and Kamada, you can compare the effects of market volatilities on PCB Tec 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 PCB Tec with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of PCB Tec and Kamada.
Diversification Opportunities for PCB Tec and Kamada
Weak diversification
The 3 months correlation between PCB and Kamada is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PCB Tec and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and PCB Tec 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 PCB Tec 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 PCB Tec i.e., PCB Tec and Kamada go up and down completely randomly.
Pair Corralation between PCB Tec and Kamada
Assuming the 90 days trading horizon PCB Tec is expected to generate 2.07 times more return on investment than Kamada. However, PCB Tec is 2.07 times more volatile than Kamada. It trades about 0.07 of its potential returns per unit of risk. Kamada is currently generating about 0.08 per unit of risk. If you would invest 69,120 in PCB Tec on August 29, 2024 and sell it today you would earn a total of 2,530 from holding PCB Tec or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
PCB Tec vs. Kamada
Performance |
| Timeline |
| PCB Tec |
| Kamada |
PCB Tec and Kamada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PCB Tec and Kamada
The main advantage of trading using opposite PCB Tec and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PCB Tec 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.The idea behind PCB Tec and Kamada 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.| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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