Correlation Between Redishred Capital and Kodiak Copper

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

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

Diversification Opportunities for Redishred Capital and Kodiak Copper

-0.02

Correlation Coefficient

Redishred Capital  Kodiak Copper

Good diversification

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

Pair Corralation between Redishred Capital and Kodiak Copper

Assuming the 90 days horizon Redishred Capital Corp is expected to generate 0.98 times more return on investment than Kodiak Copper. However, Redishred Capital Corp is 1.02 times less risky than Kodiak Copper. It trades about 0.21 of its potential returns per unit of risk. Kodiak Copper Corp is currently generating about 0.0 per unit of risk. 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

Redishred Capital Corp  vs.  Kodiak Copper Corp

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.

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.

Pair Trading with Redishred Capital and Kodiak Copper

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

The idea behind Redishred Capital Corp and Kodiak Copper 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.