Correlation Between Red Cat and Surge Copper
Can any of the company-specific risk be diversified away by investing in both Red Cat and Surge Copper 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 Surge Copper 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 Surge Copper Corp, you can compare the effects of market volatilities on Red Cat and Surge Copper 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 Surge Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Surge Copper.
Diversification Opportunities for Red Cat and Surge Copper
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Red and Surge is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Surge Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Copper 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 Surge Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Copper Corp has no effect on the direction of Red Cat i.e., Red Cat and Surge Copper go up and down completely randomly.
Pair Corralation between Red Cat and Surge Copper
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 1.11 times more return on investment than Surge Copper. However, Red Cat is 1.11 times more volatile than Surge Copper Corp. It trades about 0.14 of its potential returns per unit of risk. Surge Copper Corp is currently generating about 0.03 per unit of risk. If you would invest 97.00 in Red Cat Holdings on August 29, 2024 and sell it today you would earn a total of 830.00 from holding Red Cat Holdings or generate 855.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Cat Holdings vs. Surge Copper Corp
Performance |
| Timeline |
| Red Cat Holdings |
| Surge Copper Corp |
Red Cat and Surge Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Surge Copper
The main advantage of trading using opposite Red Cat and Surge Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Surge Copper 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 Surge Copper will offset losses from the drop in Surge Copper's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Surge Copper vs. Rockridge Resources | Surge Copper vs. Ameriwest Lithium | Surge Copper vs. Osisko Metals Incorporated | Surge Copper vs. Volt Lithium Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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