Correlation Between Kodiak Copper and Redishred Capital

Can any of the company-specific risk be diversified away by investing in both Kodiak Copper and Redishred Capital 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 Kodiak Copper and Redishred Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kodiak Copper Corp and Redishred Capital Corp, you can compare the effects of market volatilities on Kodiak Copper and Redishred Capital 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 Kodiak Copper with a short position of Redishred Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Copper and Redishred Capital.

Diversification Opportunities for Kodiak Copper and Redishred Capital

-0.02

Correlation Coefficient

Kodiak Copper  Redishred Capital

Good diversification

The 3 months correlation between Kodiak and Redishred is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and Redishred Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redishred Capital Corp and Kodiak Copper 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 Kodiak Copper Corp are associated (or correlated) with Redishred Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redishred Capital Corp has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and Redishred Capital go up and down completely randomly.

Pair Corralation between Kodiak Copper and Redishred Capital

Assuming the 90 days horizon Kodiak Copper Corp is expected to under-perform the Redishred Capital. In addition to that, Kodiak Copper is 1.02 times more volatile than Redishred Capital Corp. It trades about 0.0 of its total potential returns per unit of risk. Redishred Capital Corp is currently generating about 0.21 per unit of volatility. If you would invest  315.00  in Redishred Capital Corp on August 31, 2024 and sell it today you would earn a total of  171.00  from holding Redishred Capital Corp or generate 54.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kodiak Copper Corp  vs.  Redishred Capital Corp

Kodiak Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kodiak Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Kodiak Copper is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Redishred Capital Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Redishred Capital Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Redishred Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kodiak Copper and Redishred Capital

The main advantage of trading using opposite Kodiak Copper and Redishred Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kodiak Copper position performs unexpectedly, Redishred Capital 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 Redishred Capital will offset losses from the drop in Redishred Capital's long position.

The idea behind Kodiak Copper Corp and Redishred Capital Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.