Correlation Between Red Cat and Soluna Holdings

Can any of the company-specific risk be diversified away by investing in both Red Cat and Soluna Holdings 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 Soluna Holdings 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 Soluna Holdings, you can compare the effects of market volatilities on Red Cat and Soluna Holdings 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 Soluna Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Soluna Holdings.

Diversification Opportunities for Red Cat and Soluna Holdings

-0.26

Correlation Coefficient

Red Cat  Soluna Holdings

Very good diversification

The 3 months correlation between Red and Soluna is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Soluna Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soluna Holdings 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 Soluna Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soluna Holdings has no effect on the direction of Red Cat i.e., Red Cat and Soluna Holdings go up and down completely randomly.

Pair Corralation between Red Cat and Soluna Holdings

Given the investment horizon of 90 days Red Cat Holdings is expected to generate 0.77 times more return on investment than Soluna Holdings. However, Red Cat Holdings is 1.3 times less risky than Soluna Holdings. It trades about 0.14 of its potential returns per unit of risk. Soluna Holdings is currently generating about -0.04 per unit of risk. If you would invest  507.00  in Red Cat Holdings on May 1, 2025 and sell it today you would earn a total of  312.00  from holding Red Cat Holdings or generate 61.54% 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.  Soluna Holdings

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 10 (%) 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.

Soluna Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Red Cat and Soluna Holdings

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

The idea behind Red Cat Holdings and Soluna 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..