Correlation Between Red Cat and Neonode
Can any of the company-specific risk be diversified away by investing in both Red Cat and Neonode 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 Neonode 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 Neonode, you can compare the effects of market volatilities on Red Cat and Neonode 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 Neonode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Neonode.
Diversification Opportunities for Red Cat and Neonode
Very good diversification
The 3 months correlation between Red and Neonode is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Neonode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neonode 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 Neonode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neonode has no effect on the direction of Red Cat i.e., Red Cat and Neonode go up and down completely randomly.
Pair Corralation between Red Cat and Neonode
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 1.47 times more return on investment than Neonode. However, Red Cat is 1.47 times more volatile than Neonode. It trades about 0.21 of its potential returns per unit of risk. Neonode is currently generating about -0.07 per unit of risk. If you would invest 295.00 in Red Cat Holdings on September 17, 2024 and sell it today you would earn a total of 528.00 from holding Red Cat Holdings or generate 178.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Red Cat Holdings vs. Neonode
Performance |
Timeline |
Red Cat Holdings |
Neonode |
Red Cat and Neonode Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Red Cat and Neonode
The main advantage of trading using opposite Red Cat and Neonode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat position performs unexpectedly, Neonode 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 Neonode will offset losses from the drop in Neonode's long position.Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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