Correlation Between Kamada and Intercure

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

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

Diversification Opportunities for Kamada and Intercure

-0.68

Correlation Coefficient

Kamada  Intercure

Excellent diversification

The 3 months correlation between Kamada and Intercure is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Intercure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercure 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 Intercure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercure has no effect on the direction of Kamada i.e., Kamada and Intercure go up and down completely randomly.

Pair Corralation between Kamada and Intercure

Assuming the 90 days trading horizon Kamada is expected to generate 0.52 times more return on investment than Intercure. However, Kamada is 1.92 times less risky than Intercure. It trades about 0.02 of its potential returns per unit of risk. Intercure is currently generating about 0.01 per unit of risk. If you would invest  205,100  in Kamada on September 12, 2024 and sell it today you would earn a total of  17,000  from holding Kamada or generate 8.29% return on investment over 90 days.

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

Kamada  vs.  Intercure

Kamada

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 12 (%) 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.

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.

Pair Trading with Kamada and Intercure

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

The idea behind Kamada and Intercure 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.