Correlation Between Red Cat and Healixa
Can any of the company-specific risk be diversified away by investing in both Red Cat and Healixa 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 Healixa 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 Healixa, you can compare the effects of market volatilities on Red Cat and Healixa 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 Healixa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Healixa.
Diversification Opportunities for Red Cat and Healixa
Very good diversification
The 3 months correlation between Red and Healixa is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Healixa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healixa 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 Healixa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healixa has no effect on the direction of Red Cat i.e., Red Cat and Healixa go up and down completely randomly.
Pair Corralation between Red Cat and Healixa
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 0.57 times more return on investment than Healixa. However, Red Cat Holdings is 1.77 times less risky than Healixa. It trades about 0.13 of its potential returns per unit of risk. Healixa is currently generating about 0.02 per unit of risk. If you would invest 93.00 in Red Cat Holdings on August 31, 2024 and sell it today you would earn a total of 1,084 from holding Red Cat Holdings or generate 1165.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Red Cat Holdings vs. Healixa
Performance |
| Timeline |
| Red Cat Holdings |
| Healixa |
Red Cat and Healixa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Healixa
The main advantage of trading using opposite Red Cat and Healixa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Healixa 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 Healixa will offset losses from the drop in Healixa'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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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