Correlation Between Kaival Brands and Willamette Valley

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

Diversification Opportunities for Kaival Brands and Willamette Valley

0.47

Correlation Coefficient

Kaival Brands  Willamette Valley

Very weak diversification

The 3 months correlation between Kaival and Willamette is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kaival Brands Innovations and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Kaival Brands i.e., Kaival Brands and Willamette Valley go up and down completely randomly.

Pair Corralation between Kaival Brands and Willamette Valley

Given the investment horizon of 90 days Kaival Brands Innovations is expected to generate 10.64 times more return on investment than Willamette Valley. However, Kaival Brands is 10.64 times more volatile than Willamette Valley Vineyards. It trades about 0.02 of its potential returns per unit of risk. Willamette Valley Vineyards is currently generating about -0.05 per unit of risk. If you would invest  1,827  in Kaival Brands Innovations on October 13, 2024 and sell it today you would lose (1,715) from holding Kaival Brands Innovations or give up 93.87% of portfolio value over 90 days.

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

Kaival Brands Innovations  vs.  Willamette Valley Vineyards

Kaival Brands Innovations

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kaival Brands Innovations are ranked lower than 6 (%) 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.

Willamette Valley

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Willamette Valley Vineyards are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Willamette Valley is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kaival Brands and Willamette Valley

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

The idea behind Kaival Brands Innovations and Willamette Valley Vineyards 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.