Correlation Between ANI Pharmaceuticals and Kamada

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

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

Diversification Opportunities for ANI Pharmaceuticals and Kamada

0.01

Correlation Coefficient

ANI Pharmaceuticals  Kamada

Significant diversification

The 3 months correlation between ANI and Kamada is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and ANI Pharmaceuticals 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 ANI Pharmaceuticals 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 ANI Pharmaceuticals i.e., ANI Pharmaceuticals and Kamada go up and down completely randomly.

Pair Corralation between ANI Pharmaceuticals and Kamada

Given the investment horizon of 90 days ANI Pharmaceuticals is expected to under-perform the Kamada. In addition to that, ANI Pharmaceuticals is 1.41 times more volatile than Kamada. It trades about -0.04 of its total potential returns per unit of risk. Kamada is currently generating about 0.09 per unit of volatility. If you would invest  531.00  in Kamada on September 5, 2024 and sell it today you would earn a total of  65.00  from holding Kamada or generate 12.24% return on investment over 90 days.

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

ANI Pharmaceuticals  vs.  Kamada

ANI Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANI Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, ANI Pharmaceuticals is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Kamada

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Kamada may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ANI Pharmaceuticals and Kamada

The main advantage of trading using opposite ANI Pharmaceuticals and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANI Pharmaceuticals 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 ANI Pharmaceuticals 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.