Correlation Between Red Cat and Minaurum Gold
Can any of the company-specific risk be diversified away by investing in both Red Cat and Minaurum Gold 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 Minaurum Gold 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 Minaurum Gold, you can compare the effects of market volatilities on Red Cat and Minaurum Gold 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 Minaurum Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Minaurum Gold.
Diversification Opportunities for Red Cat and Minaurum Gold
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Red and Minaurum is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Minaurum Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minaurum Gold 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 Minaurum Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minaurum Gold has no effect on the direction of Red Cat i.e., Red Cat and Minaurum Gold go up and down completely randomly.
Pair Corralation between Red Cat and Minaurum Gold
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 1.52 times more return on investment than Minaurum Gold. However, Red Cat is 1.52 times more volatile than Minaurum Gold. It trades about 0.5 of its potential returns per unit of risk. Minaurum Gold is currently generating about -0.21 per unit of risk. If you would invest 306.00 in Red Cat Holdings on August 29, 2024 and sell it today you would earn a total of 530.00 from holding Red Cat Holdings or generate 173.2% 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. Minaurum Gold
Performance |
| Timeline |
| Red Cat Holdings |
| Minaurum Gold |
Red Cat and Minaurum Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Minaurum Gold
The main advantage of trading using opposite Red Cat and Minaurum Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Minaurum Gold 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 Minaurum Gold will offset losses from the drop in Minaurum Gold's long position.The idea behind Red Cat Holdings and Minaurum Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Minaurum Gold vs. Aurion Resources | Minaurum Gold vs. Liberty Gold Corp | Minaurum Gold vs. Orezone Gold Corp | Minaurum Gold vs. Fortuna Silver Mines |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |