Correlation Between Turning Point and Kaival Brands

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

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

Diversification Opportunities for Turning Point and Kaival Brands

0.41

Correlation Coefficient

Turning Point  Kaival Brands

Very weak diversification

The 3 months correlation between Turning and Kaival is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands 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 Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and Kaival Brands go up and down completely randomly.

Pair Corralation between Turning Point and Kaival Brands

Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.94 times more return on investment than Kaival Brands. However, Turning Point Brands is 1.06 times less risky than Kaival Brands. It trades about 0.04 of its potential returns per unit of risk. Kaival Brands Innovations is currently generating about -0.11 per unit of risk. If you would invest  7,025  in Turning Point Brands on March 3, 2025 and sell it today you would earn a total of  407.00  from holding Turning Point Brands or generate 5.79% return on investment over 90 days.

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

Turning Point Brands  vs.  Kaival Brands Innovations

Turning Point Brands

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Turning Point Brands are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Turning Point may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Kaival Brands Innovations

Risk-Adjusted Performance

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 July 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Turning Point and Kaival Brands

The main advantage of trading using opposite Turning Point and Kaival Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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 Turning Point Brands 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.