Correlation Between Red Cat and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Red Cat and Lloyds Banking 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 Lloyds Banking 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 Lloyds Banking Group, you can compare the effects of market volatilities on Red Cat and Lloyds Banking 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 Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Lloyds Banking.
Diversification Opportunities for Red Cat and Lloyds Banking
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Red and Lloyds is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group 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 Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of Red Cat i.e., Red Cat and Lloyds Banking go up and down completely randomly.
Pair Corralation between Red Cat and Lloyds Banking
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 1.91 times more return on investment than Lloyds Banking. However, Red Cat is 1.91 times more volatile than Lloyds Banking Group. It trades about 0.16 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.05 per unit of risk. If you would invest 88.00 in Red Cat Holdings on August 26, 2024 and sell it today you would earn a total of 809.00 from holding Red Cat Holdings or generate 919.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.12% |
| Values | Daily Returns |
Red Cat Holdings vs. Lloyds Banking Group
Performance |
| Timeline |
| Red Cat Holdings |
| Lloyds Banking Group |
Red Cat and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Lloyds Banking
The main advantage of trading using opposite Red Cat and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Lloyds Banking vs. PSB Holdings | Lloyds Banking vs. United Overseas Bank | Lloyds Banking vs. Turkiye Garanti Bankasi |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Transaction History View history of all your transactions and understand their impact on performance |