Correlation Between Ralco Agencies and Kamada

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

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

Diversification Opportunities for Ralco Agencies and Kamada

-0.44

Correlation Coefficient

Ralco Agencies  Kamada

Very good diversification

The 3 months correlation between Ralco and Kamada is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ralco Agencies and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Ralco Agencies 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 Ralco Agencies 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 Ralco Agencies i.e., Ralco Agencies and Kamada go up and down completely randomly.

Pair Corralation between Ralco Agencies and Kamada

Assuming the 90 days trading horizon Ralco Agencies is expected to generate 1.26 times more return on investment than Kamada. However, Ralco Agencies is 1.26 times more volatile than Kamada. It trades about 0.03 of its potential returns per unit of risk. Kamada is currently generating about 0.04 per unit of risk. If you would invest  283,081  in Ralco Agencies on January 25, 2024 and sell it today you would earn a total of  32,219  from holding Ralco Agencies or generate 11.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ralco Agencies  vs.  Kamada

Ralco Agencies

Risk-Adjusted Performance

10 of 100

OK

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

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.

Pair Trading with Ralco Agencies and Kamada

The main advantage of trading using opposite Ralco Agencies and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ralco Agencies 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 Ralco Agencies 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.