Correlation Between Caterpillar and Yamana Gold
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Yamana Gold 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 Yamana Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Yamana Gold, you can compare the effects of market volatilities on Caterpillar and Yamana Gold 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 Yamana Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Yamana Gold.
Diversification Opportunities for Caterpillar and Yamana Gold
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and Yamana is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Yamana Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamana Gold 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 Yamana Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamana Gold has no effect on the direction of Caterpillar i.e., Caterpillar and Yamana Gold go up and down completely randomly.
Pair Corralation between Caterpillar and Yamana Gold
If you would invest 32,883 in Caterpillar on September 1, 2024 and sell it today you would earn a total of 7,728 from holding Caterpillar or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Caterpillar vs. Yamana Gold
Performance |
| Timeline |
| Caterpillar |
| Yamana Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Yamana Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Yamana Gold
The main advantage of trading using opposite Caterpillar and Yamana Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Yamana Gold 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 Yamana Gold will offset losses from the drop in Yamana Gold's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| Yamana Gold vs. Agnico Eagle Mines | Yamana Gold vs. Wheaton Precious Metals | Yamana Gold vs. Newmont Goldcorp Corp | Yamana Gold vs. Kinross Gold |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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