Correlation Between Red Cat and Logiq
Can any of the company-specific risk be diversified away by investing in both Red Cat and Logiq 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 Logiq 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 Logiq Inc, you can compare the effects of market volatilities on Red Cat and Logiq 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 Logiq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Logiq.
Diversification Opportunities for Red Cat and Logiq
Excellent diversification
The 3 months correlation between Red and Logiq is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Logiq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logiq Inc 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 Logiq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logiq Inc has no effect on the direction of Red Cat i.e., Red Cat and Logiq go up and down completely randomly.
Pair Corralation between Red Cat and Logiq
Given the investment horizon of 90 days Red Cat is expected to generate 1.0 times less return on investment than Logiq. But when comparing it to its historical volatility, Red Cat Holdings is 2.42 times less risky than Logiq. It trades about 0.06 of its potential returns per unit of risk. Logiq Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Logiq Inc on November 18, 2024 and sell it today you would lose (0.30) from holding Logiq Inc or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Cat Holdings vs. Logiq Inc
Performance |
| Timeline |
| Red Cat Holdings |
| Logiq Inc |
Red Cat and Logiq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Logiq
The main advantage of trading using opposite Red Cat and Logiq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Logiq 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 Logiq will offset losses from the drop in Logiq's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Logiq vs. Tenet Fintech Group | Logiq vs. FansUnite Entertainment | Logiq vs. FingerMotion | Logiq vs. GoLogiq |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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