Correlation Between Kaival Brands and Greenlane Holdings

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

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

Diversification Opportunities for Kaival Brands and Greenlane Holdings

-0.18

Correlation Coefficient

Kaival Brands  Greenlane Holdings

Good diversification

The 3 months correlation between Kaival and Greenlane is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kaival Brands Innovations and Greenlane Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlane Holdings and Kaival Brands 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 Kaival Brands Innovations are associated (or correlated) with Greenlane Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlane Holdings has no effect on the direction of Kaival Brands i.e., Kaival Brands and Greenlane Holdings go up and down completely randomly.

Pair Corralation between Kaival Brands and Greenlane Holdings

Given the investment horizon of 90 days Kaival Brands Innovations is expected to generate 1.32 times more return on investment than Greenlane Holdings. However, Kaival Brands is 1.32 times more volatile than Greenlane Holdings. It trades about 0.06 of its potential returns per unit of risk. Greenlane Holdings is currently generating about -0.22 per unit of risk. If you would invest  74.00  in Kaival Brands Innovations on December 1, 2024 and sell it today you would earn a total of  9.00  from holding Kaival Brands Innovations or generate 12.16% return on investment over 90 days.

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

Kaival Brands Innovations  vs.  Greenlane Holdings

Kaival Brands Innovations

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kaival Brands Innovations are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Kaival Brands disclosed solid returns over the last few months and may actually be approaching a breakup point.

Greenlane Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenlane Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kaival Brands and Greenlane Holdings

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

The idea behind Kaival Brands Innovations and Greenlane Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.