Correlation Between Red Cat and Defiance Silver
Can any of the company-specific risk be diversified away by investing in both Red Cat and Defiance Silver 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 Defiance Silver 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 Defiance Silver Corp, you can compare the effects of market volatilities on Red Cat and Defiance Silver 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 Defiance Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Defiance Silver.
Diversification Opportunities for Red Cat and Defiance Silver
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Red and Defiance is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Defiance Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Silver Corp 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 Defiance Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Silver Corp has no effect on the direction of Red Cat i.e., Red Cat and Defiance Silver go up and down completely randomly.
Pair Corralation between Red Cat and Defiance Silver
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 1.0 times more return on investment than Defiance Silver. However, Red Cat is 1.0 times more volatile than Defiance Silver Corp. It trades about 0.26 of its potential returns per unit of risk. Defiance Silver Corp is currently generating about -0.02 per unit of risk. If you would invest 99.00 in Red Cat Holdings on August 24, 2024 and sell it today you would earn a total of 631.00 from holding Red Cat Holdings or generate 637.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Cat Holdings vs. Defiance Silver Corp
Performance |
| Timeline |
| Red Cat Holdings |
| Defiance Silver Corp |
Red Cat and Defiance Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Defiance Silver
The main advantage of trading using opposite Red Cat and Defiance Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Defiance Silver 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 Defiance Silver will offset losses from the drop in Defiance Silver's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Defiance Silver vs. Aftermath Silver | Defiance Silver vs. AbraSilver Resource Corp | Defiance Silver vs. Southern Silver Exploration | Defiance Silver vs. Blackrock Silver Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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