Correlation Between Red Cat and Ageagle Aerial
Can any of the company-specific risk be diversified away by investing in both Red Cat and Ageagle Aerial 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 Ageagle Aerial 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 Ageagle Aerial Systems, you can compare the effects of market volatilities on Red Cat and Ageagle Aerial 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 Ageagle Aerial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Ageagle Aerial.
Diversification Opportunities for Red Cat and Ageagle Aerial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Red and Ageagle is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Ageagle Aerial Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ageagle Aerial Systems 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 Ageagle Aerial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ageagle Aerial Systems has no effect on the direction of Red Cat i.e., Red Cat and Ageagle Aerial go up and down completely randomly.
Pair Corralation between Red Cat and Ageagle Aerial
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 1.31 times more return on investment than Ageagle Aerial. However, Red Cat is 1.31 times more volatile than Ageagle Aerial Systems. It trades about -0.25 of its potential returns per unit of risk. Ageagle Aerial Systems is currently generating about -0.53 per unit of risk. If you would invest 871.00 in Red Cat Holdings on December 1, 2024 and sell it today you would lose (251.00) from holding Red Cat Holdings or give up 28.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Cat Holdings vs. Ageagle Aerial Systems
Performance |
| Timeline |
| Red Cat Holdings |
| Ageagle Aerial Systems |
Red Cat and Ageagle Aerial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Ageagle Aerial
The main advantage of trading using opposite Red Cat and Ageagle Aerial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Ageagle Aerial 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 Ageagle Aerial will offset losses from the drop in Ageagle Aerial's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Ageagle Aerial vs. Ehang Holdings | Ageagle Aerial vs. Vislink Technologies | Ageagle Aerial vs. Foresight Autonomous Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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