Correlation Between Intercure and Kamada

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

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

Diversification Opportunities for Intercure and Kamada

-0.68

Correlation Coefficient

Intercure  Kamada

Excellent diversification

The 3 months correlation between Intercure and Kamada is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Intercure and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Intercure 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 Intercure 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 Intercure i.e., Intercure and Kamada go up and down completely randomly.

Pair Corralation between Intercure and Kamada

Assuming the 90 days trading horizon Intercure is expected to under-perform the Kamada. In addition to that, Intercure is 2.04 times more volatile than Kamada. It trades about -0.24 of its total potential returns per unit of risk. Kamada is currently generating about 0.09 per unit of volatility. If you would invest  204,000  in Kamada on September 13, 2024 and sell it today you would earn a total of  12,600  from holding Kamada or generate 6.18% return on investment over 90 days.

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

Intercure  vs.  Kamada

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kamada

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kamada may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Intercure and Kamada

The main advantage of trading using opposite Intercure and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intercure 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 Intercure 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.