Correlation Between Caterpillar and Qulitas Controladora
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Qulitas Controladora 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 Caterpillar and Qulitas Controladora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Qulitas Controladora SAB, you can compare the effects of market volatilities on Caterpillar and Qulitas Controladora 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 Caterpillar with a short position of Qulitas Controladora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Qulitas Controladora.
Diversification Opportunities for Caterpillar and Qulitas Controladora
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caterpillar and Qulitas is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Qulitas Controladora SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qulitas Controladora SAB and Caterpillar 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 Caterpillar are associated (or correlated) with Qulitas Controladora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qulitas Controladora SAB has no effect on the direction of Caterpillar i.e., Caterpillar and Qulitas Controladora go up and down completely randomly.
Pair Corralation between Caterpillar and Qulitas Controladora
Assuming the 90 days trading horizon Caterpillar is expected to generate 3.58 times less return on investment than Qulitas Controladora. But when comparing it to its historical volatility, Caterpillar is 1.06 times less risky than Qulitas Controladora. It trades about 0.07 of its potential returns per unit of risk. Qulitas Controladora SAB is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 13,229 in Qulitas Controladora SAB on November 1, 2024 and sell it today you would earn a total of 4,085 from holding Qulitas Controladora SAB or generate 30.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caterpillar vs. Qulitas Controladora SAB
Performance |
| Timeline |
| Caterpillar |
| Qulitas Controladora SAB |
Caterpillar and Qulitas Controladora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Qulitas Controladora
The main advantage of trading using opposite Caterpillar and Qulitas Controladora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Qulitas Controladora 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 Qulitas Controladora will offset losses from the drop in Qulitas Controladora's long position.| Caterpillar vs. Royal Caribbean Group | Caterpillar vs. The Walt Disney | Caterpillar vs. Promotora y Operadora | Caterpillar vs. Barclays PLC |
| Qulitas Controladora vs. Corporacin Inmobiliaria Vesta | Qulitas Controladora vs. Banco del Bajo | Qulitas Controladora vs. Megacable Holdings S | Qulitas Controladora vs. Becle SAB de |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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