Correlation Between Kamada and Shuttle Pharmaceuticals

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

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

Diversification Opportunities for Kamada and Shuttle Pharmaceuticals

-0.14

Correlation Coefficient

Kamada  Shuttle Pharmaceuticals

Good diversification

The 3 months correlation between Kamada and Shuttle is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Shuttle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle Pharmaceuticals has no effect on the direction of Kamada i.e., Kamada and Shuttle Pharmaceuticals go up and down completely randomly.

Pair Corralation between Kamada and Shuttle Pharmaceuticals

Given the investment horizon of 90 days Kamada is expected to generate 0.4 times more return on investment than Shuttle Pharmaceuticals. However, Kamada is 2.51 times less risky than Shuttle Pharmaceuticals. It trades about 0.15 of its potential returns per unit of risk. Shuttle Pharmaceuticals is currently generating about -0.71 per unit of risk. If you would invest  550.00  in Kamada on August 30, 2024 and sell it today you would earn a total of  31.00  from holding Kamada or generate 5.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Kamada  vs.  Shuttle Pharmaceuticals

Kamada

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Kamada is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Shuttle Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shuttle Pharmaceuticals 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 fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kamada and Shuttle Pharmaceuticals

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

The idea behind Kamada and Shuttle Pharmaceuticals 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.