Correlation Between Kadimastem and NewMed Energy
Can any of the company-specific risk be diversified away by investing in both Kadimastem and NewMed Energy 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 Kadimastem and NewMed Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kadimastem and NewMed Energy , you can compare the effects of market volatilities on Kadimastem and NewMed Energy 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 Kadimastem with a short position of NewMed Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kadimastem and NewMed Energy.
Diversification Opportunities for Kadimastem and NewMed Energy
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kadimastem and NewMed is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kadimastem and NewMed Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewMed Energy and Kadimastem 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 Kadimastem are associated (or correlated) with NewMed Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewMed Energy has no effect on the direction of Kadimastem i.e., Kadimastem and NewMed Energy go up and down completely randomly.
Pair Corralation between Kadimastem and NewMed Energy
Assuming the 90 days trading horizon Kadimastem is expected to generate 2.72 times more return on investment than NewMed Energy. However, Kadimastem is 2.72 times more volatile than NewMed Energy . It trades about 0.02 of its potential returns per unit of risk. NewMed Energy is currently generating about -0.14 per unit of risk. If you would invest 121,400 in Kadimastem on September 25, 2024 and sell it today you would earn a total of 300.00 from holding Kadimastem or generate 0.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Kadimastem vs. NewMed Energy
Performance |
Timeline |
Kadimastem |
NewMed Energy |
Kadimastem and NewMed Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kadimastem and NewMed Energy
The main advantage of trading using opposite Kadimastem and NewMed Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kadimastem position performs unexpectedly, NewMed Energy 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 NewMed Energy will offset losses from the drop in NewMed Energy's long position.Kadimastem vs. Kamada | Kadimastem vs. Teva Pharmaceutical Industries | Kadimastem vs. Tower Semiconductor | Kadimastem vs. Elbit Systems |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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