Correlation Between Red Cat and NEXTERA
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By analyzing existing cross correlation between Red Cat Holdings and NEXTERA ENERGY CAPITAL, you can compare the effects of market volatilities on Red Cat and NEXTERA 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 NEXTERA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and NEXTERA.
Diversification Opportunities for Red Cat and NEXTERA
Excellent diversification
The 3 months correlation between Red and NEXTERA is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and NEXTERA ENERGY CAPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTERA ENERGY CAPITAL 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 NEXTERA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTERA ENERGY CAPITAL has no effect on the direction of Red Cat i.e., Red Cat and NEXTERA go up and down completely randomly.
Pair Corralation between Red Cat and NEXTERA
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 16.94 times more return on investment than NEXTERA. However, Red Cat is 16.94 times more volatile than NEXTERA ENERGY CAPITAL. It trades about 0.24 of its potential returns per unit of risk. NEXTERA ENERGY CAPITAL is currently generating about -0.13 per unit of risk. If you would invest 311.00 in Red Cat Holdings on August 30, 2024 and sell it today you would earn a total of 616.00 from holding Red Cat Holdings or generate 198.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Red Cat Holdings vs. NEXTERA ENERGY CAPITAL
Performance |
| Timeline |
| Red Cat Holdings |
| NEXTERA ENERGY CAPITAL |
Red Cat and NEXTERA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and NEXTERA
The main advantage of trading using opposite Red Cat and NEXTERA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, NEXTERA 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 NEXTERA will offset losses from the drop in NEXTERA's long position.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| NEXTERA vs. enVVeno Medical Corp | NEXTERA vs. Bassett Furniture Industries | NEXTERA vs. Mid Atlantic Home Health | NEXTERA vs. Smith Douglas Homes |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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