Correlation Between Red Cat and Blacksky Technology
Can any of the company-specific risk be diversified away by investing in both Red Cat and Blacksky Technology 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 Red Cat and Blacksky Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Cat Holdings and Blacksky Technology, you can compare the effects of market volatilities on Red Cat and Blacksky Technology 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 Red Cat with a short position of Blacksky Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Blacksky Technology.
Diversification Opportunities for Red Cat and Blacksky Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Red and Blacksky is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Blacksky Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blacksky Technology and Red Cat 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 Red Cat Holdings are associated (or correlated) with Blacksky Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blacksky Technology has no effect on the direction of Red Cat i.e., Red Cat and Blacksky Technology go up and down completely randomly.
Pair Corralation between Red Cat and Blacksky Technology
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 1.2 times more return on investment than Blacksky Technology. However, Red Cat is 1.2 times more volatile than Blacksky Technology. It trades about 0.22 of its potential returns per unit of risk. Blacksky Technology is currently generating about 0.07 per unit of risk. If you would invest 315.00 in Red Cat Holdings on August 29, 2024 and sell it today you would earn a total of 521.00 from holding Red Cat Holdings or generate 165.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Cat Holdings vs. Blacksky Technology
Performance |
| Timeline |
| Red Cat Holdings |
| Blacksky Technology |
Red Cat and Blacksky Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Blacksky Technology
The main advantage of trading using opposite Red Cat and Blacksky Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Blacksky Technology 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 Blacksky Technology will offset losses from the drop in Blacksky Technology's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Blacksky Technology vs. Focus Universal | Blacksky Technology vs. ESCO Technologies | Blacksky Technology vs. Genasys | Blacksky Technology vs. Cepton Inc |
Check out your portfolio center.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |