Correlation Between Augwind Energy and Kadimastem

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

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

Diversification Opportunities for Augwind Energy and Kadimastem

0.45

Correlation Coefficient

Augwind Energy  Kadimastem

Very weak diversification

The 3 months correlation between Augwind and Kadimastem is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Augwind Energy Tech and Kadimastem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kadimastem and Augwind Energy 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 Augwind Energy Tech are associated (or correlated) with Kadimastem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kadimastem has no effect on the direction of Augwind Energy i.e., Augwind Energy and Kadimastem go up and down completely randomly.

Pair Corralation between Augwind Energy and Kadimastem

Assuming the 90 days trading horizon Augwind Energy Tech is expected to generate 0.87 times more return on investment than Kadimastem. However, Augwind Energy Tech is 1.15 times less risky than Kadimastem. It trades about 0.35 of its potential returns per unit of risk. Kadimastem is currently generating about 0.17 per unit of risk. If you would invest  17,440  in Augwind Energy Tech on September 23, 2024 and sell it today you would earn a total of  37,970  from holding Augwind Energy Tech or generate 217.72% return on investment over 90 days.

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

Augwind Energy Tech  vs.  Kadimastem

Augwind Energy Tech

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Augwind Energy Tech are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Augwind Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Kadimastem

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kadimastem are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kadimastem sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Augwind Energy and Kadimastem

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

The idea behind Augwind Energy Tech and Kadimastem 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.