Correlation Between Red Cat and Granite Creek
Can any of the company-specific risk be diversified away by investing in both Red Cat and Granite Creek 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 Granite Creek 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 Granite Creek Copper, you can compare the effects of market volatilities on Red Cat and Granite Creek 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 Granite Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Granite Creek.
Diversification Opportunities for Red Cat and Granite Creek
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Red and Granite is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Granite Creek Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Creek Copper 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 Granite Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Creek Copper has no effect on the direction of Red Cat i.e., Red Cat and Granite Creek go up and down completely randomly.
Pair Corralation between Red Cat and Granite Creek
Given the investment horizon of 90 days Red Cat is expected to generate 2.03 times less return on investment than Granite Creek. But when comparing it to its historical volatility, Red Cat Holdings is 1.75 times less risky than Granite Creek. It trades about 0.07 of its potential returns per unit of risk. Granite Creek Copper is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.58 in Granite Creek Copper on November 22, 2024 and sell it today you would earn a total of 0.11 from holding Granite Creek Copper or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Red Cat Holdings vs. Granite Creek Copper
Performance |
| Timeline |
| Red Cat Holdings |
| Granite Creek Copper |
Red Cat and Granite Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Granite Creek
The main advantage of trading using opposite Red Cat and Granite Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Granite Creek 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 Granite Creek will offset losses from the drop in Granite Creek's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Granite Creek vs. Macmahon Holdings Limited | Granite Creek vs. Prime Meridian Resources | Granite Creek vs. Rokmaster Resources Corp | Granite Creek vs. Hudson Resources |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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