Correlation Between Caterpillar and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Caterpillar and COSCO SHIPPING 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 COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and COSCO SHIPPING Development, you can compare the effects of market volatilities on Caterpillar and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and COSCO SHIPPING.
Diversification Opportunities for Caterpillar and COSCO SHIPPING
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and COSCO is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and COSCO SHIPPING Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Devel 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Devel has no effect on the direction of Caterpillar i.e., Caterpillar and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Caterpillar and COSCO SHIPPING
If you would invest 37,924 in Caterpillar on August 31, 2024 and sell it today you would earn a total of 2,446 from holding Caterpillar or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Caterpillar vs. COSCO SHIPPING Development
Performance |
| Timeline |
| Caterpillar |
| COSCO SHIPPING Devel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and COSCO SHIPPING
The main advantage of trading using opposite Caterpillar and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| Caterpillar vs. Deere Company | Caterpillar vs. Lindsay | Caterpillar vs. Alamo Group | Caterpillar vs. Manitowoc |
| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. COSCO SHIPPING Holdings | COSCO SHIPPING vs. Pacific Basin Shipping |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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