Correlation Between Kaival Brands and Gallaher Group

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

Diversification Opportunities for Kaival Brands and Gallaher Group

0.0

Correlation Coefficient

Kaival Brands  Gallaher Group

Pay attention - limited upside

The 3 months correlation between Kaival and Gallaher is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kaival Brands Innovations and Gallaher Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gallaher Group Plc 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 Gallaher Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gallaher Group Plc has no effect on the direction of Kaival Brands i.e., Kaival Brands and Gallaher Group go up and down completely randomly.

Pair Corralation between Kaival Brands and Gallaher Group

If you would invest  242.00  in Kaival Brands Innovations on January 17, 2024 and sell it today you would earn a total of  388.00  from holding Kaival Brands Innovations or generate 160.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Kaival Brands Innovations  vs.  Gallaher Group Plc

Kaival Brands Innovations

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kaival Brands Innovations are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Kaival Brands disclosed solid returns over the last few months and may actually be approaching a breakup point.

Gallaher Group Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gallaher Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Gallaher Group 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 Gallaher Group

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

The idea behind Kaival Brands Innovations and Gallaher Group Plc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.