Correlation Between Kamada and Multi Retail

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

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

Diversification Opportunities for Kamada and Multi Retail

0.08

Correlation Coefficient

Kamada  Multi Retail

Significant diversification

The 3 months correlation between Kamada and Multi is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Multi Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Retail Group and Kamada 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 Kamada are associated (or correlated) with Multi Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Retail Group has no effect on the direction of Kamada i.e., Kamada and Multi Retail go up and down completely randomly.

Pair Corralation between Kamada and Multi Retail

Assuming the 90 days trading horizon Kamada is expected to generate 0.61 times more return on investment than Multi Retail. However, Kamada is 1.65 times less risky than Multi Retail. It trades about 0.21 of its potential returns per unit of risk. Multi Retail Group is currently generating about 0.07 per unit of risk. If you would invest  209,800  in Kamada on September 25, 2024 and sell it today you would earn a total of  11,700  from holding Kamada or generate 5.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Kamada  vs.  Multi Retail Group

Kamada

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kamada sustained solid returns over the last few months and may actually be approaching a breakup point.

Multi Retail Group

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Retail Group are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Multi Retail sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kamada and Multi Retail

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

The idea behind Kamada and Multi Retail Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..