Correlation Between High Wire and Red Cat

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

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

Diversification Opportunities for High Wire and Red Cat

-0.58

Correlation Coefficient

High Wire  Red Cat

Excellent diversification

The 3 months correlation between High and Red is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding High Wire Networks 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 High Wire 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 High Wire Networks 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 High Wire i.e., High Wire and Red Cat go up and down completely randomly.

Pair Corralation between High Wire and Red Cat

Given the investment horizon of 90 days High Wire Networks is expected to under-perform the Red Cat. In addition to that, High Wire is 2.32 times more volatile than Red Cat Holdings. It trades about -0.09 of its total potential returns per unit of risk. Red Cat Holdings is currently generating about 0.11 per unit of volatility. If you would invest  554.00  in Red Cat Holdings on May 3, 2025 and sell it today you would earn a total of  237.00  from holding Red Cat Holdings or generate 42.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

High Wire Networks  vs.  Red Cat Holdings

High Wire Networks

Risk-Adjusted Performance

Very Weak

Over the last 90 days High Wire Networks has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Red Cat Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Red Cat Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Red Cat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with High Wire and Red Cat

The main advantage of trading using opposite High Wire and Red Cat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Wire 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.

The idea behind High Wire Networks and Red Cat Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.