Correlation Between Hiron Trade and Kamada

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

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

Diversification Opportunities for Hiron Trade and Kamada

0.72

Correlation Coefficient

Hiron Trade  Kamada

Poor diversification

The 3 months correlation between Hiron and Kamada is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hiron Trade Investments Indust and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Hiron Trade 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 Hiron Trade Investments Industrial 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 Hiron Trade i.e., Hiron Trade and Kamada go up and down completely randomly.

Pair Corralation between Hiron Trade and Kamada

Assuming the 90 days trading horizon Hiron Trade is expected to generate 2.9 times less return on investment than Kamada. But when comparing it to its historical volatility, Hiron Trade Investments Industrial is 1.45 times less risky than Kamada. It trades about 0.04 of its potential returns per unit of risk. Kamada is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  204,400  in Kamada on September 3, 2024 and sell it today you would earn a total of  12,200  from holding Kamada or generate 5.97% return on investment over 90 days.

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

Hiron Trade Investments Indust  vs.  Kamada

Hiron Trade Investments

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hiron Trade Investments Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hiron Trade 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

6 of 100

Insignificant

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 basic indicators, Kamada may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hiron Trade and Kamada

The main advantage of trading using opposite Hiron Trade and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hiron Trade 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 Hiron Trade Investments Industrial 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.