Correlation Between Remy Cointreau and Kamada

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

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

Diversification Opportunities for Remy Cointreau and Kamada

0.68

Correlation Coefficient

Remy Cointreau  Kamada

Poor diversification

The 3 months correlation between Remy and Kamada is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Remy Cointreau SA and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Remy Cointreau 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 Remy Cointreau SA 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 Remy Cointreau i.e., Remy Cointreau and Kamada go up and down completely randomly.

Pair Corralation between Remy Cointreau and Kamada

Assuming the 90 days horizon Remy Cointreau SA is expected to generate 1.05 times more return on investment than Kamada. However, Remy Cointreau is 1.05 times more volatile than Kamada. It trades about 0.01 of its potential returns per unit of risk. Kamada is currently generating about -0.19 per unit of risk. If you would invest  991.00  in Remy Cointreau SA on January 26, 2024 and sell it today you would lose (1.00) from holding Remy Cointreau SA or give up 0.1% of portfolio value over 90 days.

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

Remy Cointreau SA  vs.  Kamada

Remy Cointreau SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Remy Cointreau SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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.

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 fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Remy Cointreau and Kamada

The main advantage of trading using opposite Remy Cointreau and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remy Cointreau 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 Remy Cointreau SA 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.