Correlation Between Teva Pharmaceutical and Kamada
Can any of the company-specific risk be diversified away by investing in both Teva Pharmaceutical 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 Teva Pharmaceutical and Kamada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teva Pharmaceutical Industries and Kamada, you can compare the effects of market volatilities on Teva Pharmaceutical 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 Teva Pharmaceutical with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teva Pharmaceutical and Kamada.
Diversification Opportunities for Teva Pharmaceutical and Kamada
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teva and Kamada is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Teva Pharmaceutical Industries and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Teva Pharmaceutical 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 Teva Pharmaceutical Industries 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 Teva Pharmaceutical i.e., Teva Pharmaceutical and Kamada go up and down completely randomly.
Pair Corralation between Teva Pharmaceutical and Kamada
Assuming the 90 days trading horizon Teva Pharmaceutical Industries is expected to under-perform the Kamada. But the stock apears to be less risky and, when comparing its historical volatility, Teva Pharmaceutical Industries is 1.2 times less risky than Kamada. The stock trades about -0.04 of its potential returns per unit of risk. The Kamada is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 590.00 in Kamada on October 21, 2024 and sell it today you would earn a total of 126.00 from holding Kamada or generate 21.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Teva Pharmaceutical Industries vs. Kamada
Performance |
| Timeline |
| Teva Pharmaceutical |
| Kamada |
Teva Pharmaceutical and Kamada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teva Pharmaceutical and Kamada
The main advantage of trading using opposite Teva Pharmaceutical and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teva Pharmaceutical 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.| Teva Pharmaceutical vs. Bezeq Israeli Telecommunication | Teva Pharmaceutical vs. El Al Israel | Teva Pharmaceutical vs. Bank Leumi Le Israel | Teva Pharmaceutical vs. Elbit Systems |
| Kamada vs. Lifecore Biomedical | Kamada vs. Shuttle Pharmaceuticals | Kamada vs. Cumberland Pharmaceuticals | Kamada vs. Ironwood Pharmaceuticals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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