Correlation Between SpringBig Holdings and Red Oak

Can any of the company-specific risk be diversified away by investing in both SpringBig Holdings and Red Oak 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 SpringBig Holdings and Red Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SpringBig Holdings and Red Oak Technology, you can compare the effects of market volatilities on SpringBig Holdings and Red Oak 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 SpringBig Holdings with a short position of Red Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpringBig Holdings and Red Oak.

Diversification Opportunities for SpringBig Holdings and Red Oak

-0.46

Correlation Coefficient

SpringBig Holdings  Red Oak

Very good diversification

The 3 months correlation between SpringBig and Red is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SpringBig Holdings and Red Oak Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Oak Technology and SpringBig Holdings 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 SpringBig Holdings are associated (or correlated) with Red Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Oak Technology has no effect on the direction of SpringBig Holdings i.e., SpringBig Holdings and Red Oak go up and down completely randomly.

Pair Corralation between SpringBig Holdings and Red Oak

If you would invest  4,532  in Red Oak Technology on August 31, 2024 and sell it today you would earn a total of  317.00  from holding Red Oak Technology or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

SpringBig Holdings  vs.  Red Oak Technology

SpringBig Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Red Oak Technology

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Red Oak Technology are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Red Oak may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with SpringBig Holdings and Red Oak

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

The idea behind SpringBig Holdings and Red Oak Technology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.