Correlation Between Red Cat and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both Red Cat and SPC Nickel 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 SPC Nickel 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 SPC Nickel Corp, you can compare the effects of market volatilities on Red Cat and SPC Nickel 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 SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and SPC Nickel.
Diversification Opportunities for Red Cat and SPC Nickel
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Red and SPC is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and SPC Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPC Nickel Corp 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 SPC Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPC Nickel Corp has no effect on the direction of Red Cat i.e., Red Cat and SPC Nickel go up and down completely randomly.
Pair Corralation between Red Cat and SPC Nickel
Given the investment horizon of 90 days Red Cat is expected to generate 1.43 times less return on investment than SPC Nickel. But when comparing it to its historical volatility, Red Cat Holdings is 2.69 times less risky than SPC Nickel. It trades about 0.09 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.73 in SPC Nickel Corp on August 25, 2024 and sell it today you would lose (2.33) from holding SPC Nickel Corp or give up 62.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Cat Holdings vs. SPC Nickel Corp
Performance |
| Timeline |
| Red Cat Holdings |
| SPC Nickel Corp |
Red Cat and SPC Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and SPC Nickel
The main advantage of trading using opposite Red Cat and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, SPC Nickel 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 SPC Nickel will offset losses from the drop in SPC Nickel's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| SPC Nickel vs. Norra Metals Corp | SPC Nickel vs. ZincX Resources Corp | SPC Nickel vs. Nuinsco Resources Limited | SPC Nickel vs. South Star Battery |
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.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |