Correlation Between GREENX METALS and Caterpillar
Can any of the company-specific risk be diversified away by investing in both GREENX METALS 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 GREENX METALS and Caterpillar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and Caterpillar, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Caterpillar.
Diversification Opportunities for GREENX METALS and Caterpillar
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GREENX and Caterpillar is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and GREENX METALS 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 GREENX METALS LTD 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 GREENX METALS i.e., GREENX METALS and Caterpillar go up and down completely randomly.
Pair Corralation between GREENX METALS and Caterpillar
Assuming the 90 days trading horizon GREENX METALS is expected to generate 19.35 times less return on investment than Caterpillar. In addition to that, GREENX METALS is 2.6 times more volatile than Caterpillar. It trades about 0.0 of its total potential returns per unit of risk. Caterpillar is currently generating about 0.12 per unit of volatility. If you would invest 23,198 in Caterpillar on September 2, 2024 and sell it today you would earn a total of 15,402 from holding Caterpillar or generate 66.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. Caterpillar
Performance |
| Timeline |
| GREENX METALS LTD |
| Caterpillar |
GREENX METALS and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and Caterpillar
The main advantage of trading using opposite GREENX METALS and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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.| GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. Origin Agritech | GREENX METALS vs. SIVERS SEMICONDUCTORS AB |
| Caterpillar vs. GREENX METALS LTD | Caterpillar vs. PLAYSTUDIOS A DL 0001 | Caterpillar vs. FIREWEED METALS P | Caterpillar vs. ADRIATIC METALS LS 013355 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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