Correlation Between Caterpillar and EMLD Old
Can any of the company-specific risk be diversified away by investing in both Caterpillar and EMLD Old 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 EMLD Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and EMLD Old, you can compare the effects of market volatilities on Caterpillar and EMLD Old 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 EMLD Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and EMLD Old.
Diversification Opportunities for Caterpillar and EMLD Old
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and EMLD is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and EMLD Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMLD Old 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 EMLD Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMLD Old has no effect on the direction of Caterpillar i.e., Caterpillar and EMLD Old go up and down completely randomly.
Pair Corralation between Caterpillar and EMLD Old
If you would invest 1,098 in EMLD Old on October 15, 2024 and sell it today you would earn a total of 0.00 from holding EMLD Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Caterpillar vs. EMLD Old
Performance |
| Timeline |
| Caterpillar |
| EMLD Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and EMLD Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and EMLD Old
The main advantage of trading using opposite Caterpillar and EMLD Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, EMLD Old 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 EMLD Old will offset losses from the drop in EMLD Old's long position.| Caterpillar vs. Deere Company | Caterpillar vs. GreenPower Motor | Caterpillar vs. Hyster Yale Materials Handling | Caterpillar vs. CEA Industries Warrant |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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