Correlation Between Red Cat and Manganese
Can any of the company-specific risk be diversified away by investing in both Red Cat and Manganese 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 Manganese 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 Manganese X Energy, you can compare the effects of market volatilities on Red Cat and Manganese 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 Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Manganese.
Diversification Opportunities for Red Cat and Manganese
Very good diversification
The 3 months correlation between Red and Manganese is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Manganese X Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manganese X Energy 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 Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manganese X Energy has no effect on the direction of Red Cat i.e., Red Cat and Manganese go up and down completely randomly.
Pair Corralation between Red Cat and Manganese
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 0.87 times more return on investment than Manganese. However, Red Cat Holdings is 1.16 times less risky than Manganese. It trades about 0.1 of its potential returns per unit of risk. Manganese X Energy is currently generating about -0.01 per unit of risk. If you would invest 115.00 in Red Cat Holdings on August 29, 2024 and sell it today you would earn a total of 812.00 from holding Red Cat Holdings or generate 706.09% 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. Manganese X Energy
Performance |
| Timeline |
| Red Cat Holdings |
| Manganese X Energy |
Red Cat and Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Manganese
The main advantage of trading using opposite Red Cat and Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Manganese 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 Manganese will offset losses from the drop in Manganese's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Manganese vs. Talon Metals Corp | Manganese vs. Electra Battery Materials | Manganese vs. Lithium Americas Corp | Manganese vs. New Age Metals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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