Correlation Between Kamada and El Al

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

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

Diversification Opportunities for Kamada and El Al

0.77

Correlation Coefficient

Kamada  El Al

Poor diversification

The 3 months correlation between Kamada and ELAL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and El Al Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Al Israel and Kamada 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 Kamada are associated (or correlated) with El Al. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Al Israel has no effect on the direction of Kamada i.e., Kamada and El Al go up and down completely randomly.

Pair Corralation between Kamada and El Al

Assuming the 90 days trading horizon Kamada is expected to generate 1.95 times less return on investment than El Al. In addition to that, Kamada is 1.36 times more volatile than El Al Israel. It trades about 0.1 of its total potential returns per unit of risk. El Al Israel is currently generating about 0.27 per unit of volatility. If you would invest  78,790  in El Al Israel on December 29, 2024 and sell it today you would earn a total of  41,010  from holding El Al Israel or generate 52.05% return on investment over 90 days.

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

Kamada  vs.  El Al Israel

Kamada

Risk-Adjusted Performance

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 sustained solid returns over the last few months and may actually be approaching a breakup point.

El Al Israel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in El Al Israel are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, El Al sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kamada and El Al

The main advantage of trading using opposite Kamada and El Al positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, El Al 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 El Al will offset losses from the drop in El Al's long position.

The idea behind Kamada and El Al Israel 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.