Correlation Between Kamada and Panaxia Labs

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

By analyzing existing cross correlation between Kamada and Panaxia Labs Israel, you can compare the effects of market volatilities on Kamada and Panaxia Labs 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 Panaxia Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamada and Panaxia Labs.

Diversification Opportunities for Kamada and Panaxia Labs

0.06

Correlation Coefficient

Kamada  Panaxia Labs

Significant diversification

The 3 months correlation between Kamada and Panaxia is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kamada and Panaxia Labs Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panaxia Labs Israel 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 Panaxia Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panaxia Labs Israel has no effect on the direction of Kamada i.e., Kamada and Panaxia Labs go up and down completely randomly.

Pair Corralation between Kamada and Panaxia Labs

Assuming the 90 days trading horizon Kamada is expected to generate 0.22 times more return on investment than Panaxia Labs. However, Kamada is 4.61 times less risky than Panaxia Labs. It trades about -0.42 of its potential returns per unit of risk. Panaxia Labs Israel is currently generating about -0.37 per unit of risk. If you would invest  206,000  in Kamada on March 11, 2024 and sell it today you would lose (15,400) from holding Kamada or give up 7.48% of portfolio value over 90 days.

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

Kamada  vs.  Panaxia Labs Israel

Kamada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kamada has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Panaxia Labs Israel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panaxia Labs Israel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kamada and Panaxia Labs

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

The idea behind Kamada and Panaxia Labs Israel 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.