Correlation Between SIVERS SEMICONDUCTORS and Caterpillar
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS and Caterpillar 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 SIVERS SEMICONDUCTORS and Caterpillar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIVERS SEMICONDUCTORS AB and Caterpillar, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS and Caterpillar 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 SIVERS SEMICONDUCTORS with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and Caterpillar.
Diversification Opportunities for SIVERS SEMICONDUCTORS and Caterpillar
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SIVERS and Caterpillar is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB are associated (or correlated) with Caterpillar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caterpillar has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and Caterpillar go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and Caterpillar
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the Caterpillar. In addition to that, SIVERS SEMICONDUCTORS is 8.28 times more volatile than Caterpillar. It trades about -0.13 of its total potential returns per unit of risk. Caterpillar is currently generating about 0.05 per unit of volatility. If you would invest 37,450 in Caterpillar on September 12, 2024 and sell it today you would earn a total of 550.00 from holding Caterpillar or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. Caterpillar
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| Caterpillar |
SIVERS SEMICONDUCTORS and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and Caterpillar
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS position performs unexpectedly, Caterpillar 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 Caterpillar will offset losses from the drop in Caterpillar's long position.| SIVERS SEMICONDUCTORS vs. Taiwan Semiconductor Manufacturing | SIVERS SEMICONDUCTORS vs. Broadcom | SIVERS SEMICONDUCTORS vs. Superior Plus Corp | SIVERS SEMICONDUCTORS vs. Norsk Hydro ASA |
| Caterpillar vs. AB Volvo | Caterpillar vs. Daimler Truck Holding | Caterpillar vs. Superior Plus Corp | Caterpillar vs. SIVERS SEMICONDUCTORS AB |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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