Correlation Between Rekah Pharmaceutical and Kamada

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

By analyzing existing cross correlation between Rekah Pharmaceutical Industry and Kamada, you can compare the effects of market volatilities on Rekah Pharmaceutical and Kamada 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 Rekah Pharmaceutical with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rekah Pharmaceutical and Kamada.

Diversification Opportunities for Rekah Pharmaceutical and Kamada

0.27

Correlation Coefficient

Rekah Pharmaceutical  Kamada

Modest diversification

The 3 months correlation between Rekah and Kamada is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rekah Pharmaceutical Industry and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Rekah Pharmaceutical 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 Rekah Pharmaceutical Industry are associated (or correlated) with Kamada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamada has no effect on the direction of Rekah Pharmaceutical i.e., Rekah Pharmaceutical and Kamada go up and down completely randomly.

Pair Corralation between Rekah Pharmaceutical and Kamada

Assuming the 90 days trading horizon Rekah Pharmaceutical is expected to generate 11.0 times less return on investment than Kamada. In addition to that, Rekah Pharmaceutical is 2.24 times more volatile than Kamada. It trades about 0.0 of its total potential returns per unit of risk. Kamada is currently generating about 0.07 per unit of volatility. If you would invest  204,700  in Kamada on September 5, 2024 and sell it today you would earn a total of  9,700  from holding Kamada or generate 4.74% return on investment over 90 days.

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

Rekah Pharmaceutical Industry  vs.  Kamada

Rekah Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rekah Pharmaceutical Industry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Rekah Pharmaceutical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Rekah Pharmaceutical and Kamada

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

The idea behind Rekah Pharmaceutical Industry and Kamada 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.