Correlation Between Kamada and Space

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

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

Diversification Opportunities for Kamada and Space

0.36

Correlation Coefficient

Kamada  Space

Weak diversification

The 3 months correlation between Kamada and Space is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Space Com in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Com 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 Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Com has no effect on the direction of Kamada i.e., Kamada and Space go up and down completely randomly.

Pair Corralation between Kamada and Space

Assuming the 90 days trading horizon Kamada is expected to generate 0.49 times more return on investment than Space. However, Kamada is 2.05 times less risky than Space. It trades about -0.14 of its potential returns per unit of risk. Space Com is currently generating about -0.28 per unit of risk. If you would invest  223,000  in Kamada on September 16, 2024 and sell it today you would lose (9,000) from holding Kamada or give up 4.04% of portfolio value over 90 days.

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

Kamada  vs.  Space Com

Kamada

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 5 (%) 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.

Space Com

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Space Com are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Space sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kamada and Space

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

The idea behind Kamada and Space Com 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.