Correlation Between Red Cat and CP ALL
Can any of the company-specific risk be diversified away by investing in both Red Cat and CP ALL 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 CP ALL 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 CP ALL Public, you can compare the effects of market volatilities on Red Cat and CP ALL 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 CP ALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and CP ALL.
Diversification Opportunities for Red Cat and CP ALL
Average diversification
The 3 months correlation between Red and CVPBF is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public 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 CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of Red Cat i.e., Red Cat and CP ALL go up and down completely randomly.
Pair Corralation between Red Cat and CP ALL
If you would invest 254.00 in Red Cat Holdings on August 30, 2024 and sell it today you would earn a total of 673.00 from holding Red Cat Holdings or generate 264.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Red Cat Holdings vs. CP ALL Public
Performance |
| Timeline |
| Red Cat Holdings |
| CP ALL Public |
Red Cat and CP ALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and CP ALL
The main advantage of trading using opposite Red Cat and CP ALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, CP ALL 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 CP ALL will offset losses from the drop in CP ALL's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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