Correlation Between Caterpillar and Troilus Gold
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Troilus 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 Troilus Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Troilus Gold Corp, you can compare the effects of market volatilities on Caterpillar and Troilus 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 Troilus Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Troilus Gold.
Diversification Opportunities for Caterpillar and Troilus Gold
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and Troilus is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Troilus Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troilus Gold Corp 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 Troilus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troilus Gold Corp has no effect on the direction of Caterpillar i.e., Caterpillar and Troilus Gold go up and down completely randomly.
Pair Corralation between Caterpillar and Troilus Gold
Considering the 90-day investment horizon Caterpillar is expected to generate 0.34 times more return on investment than Troilus Gold. However, Caterpillar is 2.96 times less risky than Troilus Gold. It trades about 0.13 of its potential returns per unit of risk. Troilus Gold Corp is currently generating about 0.01 per unit of risk. If you would invest 23,452 in Caterpillar on September 1, 2024 and sell it today you would earn a total of 17,159 from holding Caterpillar or generate 73.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caterpillar vs. Troilus Gold Corp
Performance |
| Timeline |
| Caterpillar |
| Troilus Gold Corp |
Caterpillar and Troilus Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Troilus Gold
The main advantage of trading using opposite Caterpillar and Troilus Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Troilus 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 Troilus Gold will offset losses from the drop in Troilus Gold's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| Troilus Gold vs. Salazar Resources Limited | Troilus Gold vs. Gensource Potash | Troilus Gold vs. Avarone Metals | Troilus Gold vs. Aurelia Metals Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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