Correlation Between Gelteq Limited and Kamada

Can any of the company-specific risk be diversified away by investing in both Gelteq Limited 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 Gelteq Limited and Kamada into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gelteq Limited Ordinary and Kamada, you can compare the effects of market volatilities on Gelteq Limited 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 Gelteq Limited with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gelteq Limited and Kamada.

Diversification Opportunities for Gelteq Limited and Kamada

0.09

Correlation Coefficient

Gelteq Limited  Kamada

Significant diversification

The 3 months correlation between Gelteq and Kamada is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gelteq Limited Ordinary and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Gelteq Limited 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 Gelteq Limited Ordinary 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 Gelteq Limited i.e., Gelteq Limited and Kamada go up and down completely randomly.

Pair Corralation between Gelteq Limited and Kamada

Given the investment horizon of 90 days Gelteq Limited Ordinary is expected to generate 12.01 times more return on investment than Kamada. However, Gelteq Limited is 12.01 times more volatile than Kamada. It trades about 0.15 of its potential returns per unit of risk. Kamada is currently generating about 0.2 per unit of risk. If you would invest  192.00  in Gelteq Limited Ordinary on October 6, 2024 and sell it today you would earn a total of  54.00  from holding Gelteq Limited Ordinary or generate 28.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gelteq Limited Ordinary  vs.  Kamada

Gelteq Limited Ordinary

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gelteq Limited Ordinary are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Gelteq Limited unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kamada

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Kamada sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gelteq Limited and Kamada

The main advantage of trading using opposite Gelteq Limited and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gelteq Limited 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 Gelteq Limited Ordinary 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.