Correlation Between Tower Semiconductor and Kamada
Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor 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 Tower Semiconductor and Kamada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and Kamada, you can compare the effects of market volatilities on Tower Semiconductor 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 Tower Semiconductor with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and Kamada.
Diversification Opportunities for Tower Semiconductor and Kamada
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tower and Kamada is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor i.e., Tower Semiconductor and Kamada go up and down completely randomly.
Pair Corralation between Tower Semiconductor and Kamada
Assuming the 90 days trading horizon Tower Semiconductor is expected to generate 1.02 times less return on investment than Kamada. In addition to that, Tower Semiconductor is 2.04 times more volatile than Kamada. It trades about 0.08 of its total potential returns per unit of risk. Kamada is currently generating about 0.16 per unit of volatility. If you would invest 547.00 in Kamada on August 29, 2024 and sell it today you would earn a total of 34.00 from holding Kamada or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Tower Semiconductor vs. Kamada
Performance |
| Timeline |
| Tower Semiconductor |
| Kamada |
Tower Semiconductor and Kamada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Semiconductor and Kamada
The main advantage of trading using opposite Tower Semiconductor and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor 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.| Tower Semiconductor vs. Teva Pharmaceutical Industries | Tower Semiconductor vs. Elbit Systems | Tower Semiconductor vs. Nice | Tower Semiconductor vs. Bezeq Israeli Telecommunication |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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