Correlation Between Kamada and Compugen
Can any of the company-specific risk be diversified away by investing in both Kamada and Compugen 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 Compugen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamada and Compugen, you can compare the effects of market volatilities on Kamada and Compugen 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 Compugen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Compugen.
Diversification Opportunities for Kamada and Compugen
Good diversification
The 3 months correlation between Kamada and Compugen is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen 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 Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Kamada i.e., Kamada and Compugen go up and down completely randomly.
Pair Corralation between Kamada and Compugen
Assuming the 90 days trading horizon Kamada is expected to generate 0.59 times more return on investment than Compugen. However, Kamada is 1.71 times less risky than Compugen. It trades about -0.13 of its potential returns per unit of risk. Compugen is currently generating about -0.38 per unit of risk. If you would invest 206,500 in Kamada on January 26, 2024 and sell it today you would lose (7,900) from holding Kamada or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamada vs. Compugen
Performance |
| Timeline |
| Kamada |
| Compugen |
Kamada and Compugen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamada and Compugen
The main advantage of trading using opposite Kamada and Compugen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamada position performs unexpectedly, Compugen 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 Compugen will offset losses from the drop in Compugen's long position.The idea behind Kamada and Compugen 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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