Correlation Between Internet Gold and Kamada

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

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

Diversification Opportunities for Internet Gold and Kamada

-0.29

Correlation Coefficient

Internet Gold  Kamada

Very good diversification

The 3 months correlation between Internet and Kamada is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Internet Gold Golden and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Internet Gold 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 Internet Gold Golden 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 Internet Gold i.e., Internet Gold and Kamada go up and down completely randomly.

Pair Corralation between Internet Gold and Kamada

Assuming the 90 days trading horizon Internet Gold Golden is expected to generate 4.03 times more return on investment than Kamada. However, Internet Gold is 4.03 times more volatile than Kamada. It trades about 0.02 of its potential returns per unit of risk. Kamada is currently generating about 0.06 per unit of risk. If you would invest  79,050  in Internet Gold Golden on October 22, 2024 and sell it today you would lose (30,560) from holding Internet Gold Golden or give up 38.66% of portfolio value over 90 days.

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

Internet Gold Golden  vs.  Kamada

Internet Gold Golden

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Gold Golden are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Internet Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Kamada

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kamada sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Internet Gold and Kamada

The main advantage of trading using opposite Internet Gold and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Gold 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 Internet Gold Golden 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.