Correlation Between Caterpillar and BiOasis Technologies
Can any of the company-specific risk be diversified away by investing in both Caterpillar and BiOasis Technologies 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 BiOasis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and biOasis Technologies, you can compare the effects of market volatilities on Caterpillar and BiOasis Technologies 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 BiOasis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and BiOasis Technologies.
Diversification Opportunities for Caterpillar and BiOasis Technologies
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Caterpillar and BiOasis is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and biOasis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on biOasis Technologies 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 BiOasis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of biOasis Technologies has no effect on the direction of Caterpillar i.e., Caterpillar and BiOasis Technologies go up and down completely randomly.
Pair Corralation between Caterpillar and BiOasis Technologies
If you would invest 36,246 in Caterpillar on November 4, 2024 and sell it today you would earn a total of 898.00 from holding Caterpillar or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Caterpillar vs. biOasis Technologies
Performance |
| Timeline |
| Caterpillar |
| biOasis Technologies |
Caterpillar and BiOasis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and BiOasis Technologies
The main advantage of trading using opposite Caterpillar and BiOasis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, BiOasis Technologies 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 BiOasis Technologies will offset losses from the drop in BiOasis Technologies' long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| BiOasis Technologies vs. Biotron Limited | BiOasis Technologies vs. Covalon Technologies | BiOasis Technologies vs. Mosaic Immunoengineering | BiOasis Technologies vs. Cellectis SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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