Correlation Between Stryve Foods and Kaival Brands

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

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

Diversification Opportunities for Stryve Foods and Kaival Brands

0.42

Correlation Coefficient

Stryve Foods  Kaival Brands

Very weak diversification

The 3 months correlation between Stryve and Kaival is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stryve Foods and Kaival Brands Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaival Brands Innovations and Stryve Foods 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 Stryve Foods are associated (or correlated) with Kaival Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaival Brands Innovations has no effect on the direction of Stryve Foods i.e., Stryve Foods and Kaival Brands go up and down completely randomly.

Pair Corralation between Stryve Foods and Kaival Brands

Given the investment horizon of 90 days Stryve Foods is expected to under-perform the Kaival Brands. But the stock apears to be less risky and, when comparing its historical volatility, Stryve Foods is 4.86 times less risky than Kaival Brands. The stock trades about -0.04 of its potential returns per unit of risk. The Kaival Brands Innovations is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  394.00  in Kaival Brands Innovations on October 9, 2024 and sell it today you would lose (307.00) from holding Kaival Brands Innovations or give up 77.92% of portfolio value over 90 days.

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

Stryve Foods  vs.  Kaival Brands Innovations

Stryve Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stryve Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kaival Brands Innovations

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaival Brands Innovations are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Kaival Brands may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Stryve Foods and Kaival Brands

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

The idea behind Stryve Foods and Kaival Brands Innovations 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.