Correlation Between Endymed and Kamada

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

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

Diversification Opportunities for Endymed and Kamada

0.38

Correlation Coefficient

Endymed  Kamada

Weak diversification

The 3 months correlation between Endymed and Kamada is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Endymed and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Endymed 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 Endymed 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 Endymed i.e., Endymed and Kamada go up and down completely randomly.

Pair Corralation between Endymed and Kamada

Assuming the 90 days trading horizon Endymed is expected to under-perform the Kamada. In addition to that, Endymed is 1.36 times more volatile than Kamada. It trades about -0.03 of its total potential returns per unit of risk. Kamada is currently generating about 0.02 per unit of volatility. If you would invest  589.00  in Kamada on September 29, 2024 and sell it today you would earn a total of  3.00  from holding Kamada or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

Endymed  vs.  Kamada

Endymed

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endymed are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Endymed sustained solid returns over the last few months and may actually be approaching a breakup point.

Kamada

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 8 (%) 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 Endymed and Kamada

The main advantage of trading using opposite Endymed and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endymed 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 Endymed 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.

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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.