Correlation Between Caterpillar and Athenex
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Athenex 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 Athenex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Athenex, you can compare the effects of market volatilities on Caterpillar and Athenex 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 Athenex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Athenex.
Diversification Opportunities for Caterpillar and Athenex
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Athenex is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Athenex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athenex 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 Athenex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athenex has no effect on the direction of Caterpillar i.e., Caterpillar and Athenex go up and down completely randomly.
Pair Corralation between Caterpillar and Athenex
If you would invest 38,706 in Caterpillar on August 25, 2024 and sell it today you would earn a total of 1,043 from holding Caterpillar or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Caterpillar vs. Athenex
Performance |
| Timeline |
| Caterpillar |
| Athenex |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Athenex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Athenex
The main advantage of trading using opposite Caterpillar and Athenex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Athenex 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 Athenex will offset losses from the drop in Athenex's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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