Correlation Between Kamada and Gelteq Limited

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

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

Diversification Opportunities for Kamada and Gelteq Limited

0.09

Correlation Coefficient

Kamada  Gelteq Limited

Significant diversification

The 3 months correlation between Kamada and Gelteq is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Gelteq Limited Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gelteq Limited Ordinary 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 Gelteq Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gelteq Limited Ordinary has no effect on the direction of Kamada i.e., Kamada and Gelteq Limited go up and down completely randomly.

Pair Corralation between Kamada and Gelteq Limited

Given the investment horizon of 90 days Kamada is expected to generate 6.74 times less return on investment than Gelteq Limited. But when comparing it to its historical volatility, Kamada is 12.17 times less risky than Gelteq Limited. It trades about 0.17 of its potential returns per unit of risk. Gelteq Limited Ordinary is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  240.00  in Gelteq Limited Ordinary on October 5, 2024 and sell it today you would lose (2.00) from holding Gelteq Limited Ordinary or give up 0.83% of portfolio value over 90 days.

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

Kamada  vs.  Gelteq Limited Ordinary

Kamada

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Kamada sustained solid returns over the last few months and may actually be approaching a breakup point.

Gelteq Limited Ordinary

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gelteq Limited Ordinary are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Gelteq Limited unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kamada and Gelteq Limited

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

The idea behind Kamada and Gelteq Limited Ordinary 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.