Correlation Between Red Cat and Dassault Systemes
Can any of the company-specific risk be diversified away by investing in both Red Cat and Dassault Systemes 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 Dassault Systemes 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 Dassault Systemes SE, you can compare the effects of market volatilities on Red Cat and Dassault Systemes 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 Dassault Systemes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Dassault Systemes.
Diversification Opportunities for Red Cat and Dassault Systemes
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Red and Dassault is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Dassault Systemes SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systemes 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 Dassault Systemes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Systemes has no effect on the direction of Red Cat i.e., Red Cat and Dassault Systemes go up and down completely randomly.
Pair Corralation between Red Cat and Dassault Systemes
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 2.66 times more return on investment than Dassault Systemes. However, Red Cat is 2.66 times more volatile than Dassault Systemes SE. It trades about 0.09 of its potential returns per unit of risk. Dassault Systemes SE is currently generating about 0.0 per unit of risk. If you would invest 114.00 in Red Cat Holdings on August 26, 2024 and sell it today you would earn a total of 616.00 from holding Red Cat Holdings or generate 540.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Red Cat Holdings vs. Dassault Systemes SE
Performance |
| Timeline |
| Red Cat Holdings |
| Dassault Systemes |
Red Cat and Dassault Systemes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Dassault Systemes
The main advantage of trading using opposite Red Cat and Dassault Systemes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Dassault Systemes 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 Dassault Systemes will offset losses from the drop in Dassault Systemes' long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Dassault Systemes vs. Salesforce | Dassault Systemes vs. SAP SE ADR | Dassault Systemes vs. ServiceNow | Dassault Systemes vs. Intuit 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |