Correlation Between Oblong and Red Cat
Can any of the company-specific risk be diversified away by investing in both Oblong and Red Cat 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 Oblong and Red Cat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oblong Inc and Red Cat Holdings, you can compare the effects of market volatilities on Oblong and Red Cat 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 Oblong with a short position of Red Cat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oblong and Red Cat.
Diversification Opportunities for Oblong and Red Cat
Very good diversification
The 3 months correlation between Oblong and Red is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Oblong Inc and Red Cat Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Cat Holdings and Oblong 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 Oblong Inc are associated (or correlated) with Red Cat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Cat Holdings has no effect on the direction of Oblong i.e., Oblong and Red Cat go up and down completely randomly.
Pair Corralation between Oblong and Red Cat
Given the investment horizon of 90 days Oblong is expected to generate 8.03 times less return on investment than Red Cat. But when comparing it to its historical volatility, Oblong Inc is 2.68 times less risky than Red Cat. It trades about 0.03 of its potential returns per unit of risk. Red Cat Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 961.00 in Red Cat Holdings on September 25, 2024 and sell it today you would earn a total of 114.00 from holding Red Cat Holdings or generate 11.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Oblong Inc vs. Red Cat Holdings
Performance |
Timeline |
Oblong Inc |
Red Cat Holdings |
Oblong and Red Cat Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oblong and Red Cat
The main advantage of trading using opposite Oblong and Red Cat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oblong position performs unexpectedly, Red Cat 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 Red Cat will offset losses from the drop in Red Cat's long position.Oblong vs. Full Truck Alliance | Oblong vs. Kingsoft Cloud Holdings | Oblong vs. Bm Technologies | Oblong vs. ePlus inc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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