Correlation Between Bet Shemesh and Kamada

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

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

Diversification Opportunities for Bet Shemesh and Kamada

0.65

Correlation Coefficient

Bet Shemesh  Kamada

Poor diversification

The 3 months correlation between Bet and Kamada is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bet Shemesh Engines and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Bet Shemesh 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 Bet Shemesh Engines 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 Bet Shemesh i.e., Bet Shemesh and Kamada go up and down completely randomly.

Pair Corralation between Bet Shemesh and Kamada

Assuming the 90 days trading horizon Bet Shemesh Engines is expected to generate 2.01 times more return on investment than Kamada. However, Bet Shemesh is 2.01 times more volatile than Kamada. It trades about 0.15 of its potential returns per unit of risk. Kamada is currently generating about 0.07 per unit of risk. If you would invest  2,347,000  in Bet Shemesh Engines on September 15, 2024 and sell it today you would earn a total of  532,000  from holding Bet Shemesh Engines or generate 22.67% return on investment over 90 days.

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

Bet Shemesh Engines  vs.  Kamada

Bet Shemesh Engines

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bet Shemesh Engines are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bet Shemesh sustained solid returns over the last few months and may actually be approaching a breakup point.

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 Bet Shemesh and Kamada

The main advantage of trading using opposite Bet Shemesh and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet Shemesh 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 Bet Shemesh Engines 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.