Correlation Between Kamada and Rami Levi

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

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

Diversification Opportunities for Kamada and Rami Levi

0.72

Correlation Coefficient

Kamada  Rami Levi

Poor diversification

The 3 months correlation between Kamada and Rami is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Rami Levi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rami Levi 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 Rami Levi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rami Levi has no effect on the direction of Kamada i.e., Kamada and Rami Levi go up and down completely randomly.

Pair Corralation between Kamada and Rami Levi

Assuming the 90 days trading horizon Kamada is expected to generate 2.93 times more return on investment than Rami Levi. However, Kamada is 2.93 times more volatile than Rami Levi. It trades about 0.09 of its potential returns per unit of risk. Rami Levi is currently generating about 0.13 per unit of risk. If you would invest  216,600  in Kamada on December 2, 2024 and sell it today you would earn a total of  37,800  from holding Kamada or generate 17.45% return on investment over 90 days.

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

Kamada  vs.  Rami Levi

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.

Rami Levi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rami Levi are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Rami Levi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kamada and Rami Levi

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

The idea behind Kamada and Rami Levi 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.