Correlation Between Kaival Brands and Weyco

Can any of the company-specific risk be diversified away by investing in both Kaival Brands and Weyco 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 Weyco 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 Weyco Group, you can compare the effects of market volatilities on Kaival Brands and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaival Brands and Weyco.

Diversification Opportunities for Kaival Brands and Weyco

-0.33

Correlation Coefficient

Kaival Brands  Weyco

Very good diversification

The 3 months correlation between Kaival and Weyco is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kaival Brands Innovations and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Kaival Brands i.e., Kaival Brands and Weyco go up and down completely randomly.

Pair Corralation between Kaival Brands and Weyco

Given the investment horizon of 90 days Kaival Brands Innovations is expected to generate 2.03 times more return on investment than Weyco. However, Kaival Brands is 2.03 times more volatile than Weyco Group. It trades about 0.17 of its potential returns per unit of risk. Weyco Group is currently generating about 0.05 per unit of risk. If you would invest  72.00  in Kaival Brands Innovations on September 25, 2024 and sell it today you would earn a total of  11.00  from holding Kaival Brands Innovations or generate 15.28% 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.  Weyco Group

Kaival Brands Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaival Brands Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Weyco Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Weyco Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Weyco unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaival Brands and Weyco

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

The idea behind Kaival Brands Innovations and Weyco Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.