Correlation Between Caterpillar and Evofem Biosciences
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Evofem Biosciences 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 Evofem Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Evofem Biosciences, you can compare the effects of market volatilities on Caterpillar and Evofem Biosciences 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 Evofem Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Evofem Biosciences.
Diversification Opportunities for Caterpillar and Evofem Biosciences
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Evofem is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences 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 Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of Caterpillar i.e., Caterpillar and Evofem Biosciences go up and down completely randomly.
Pair Corralation between Caterpillar and Evofem Biosciences
If you would invest 37,963 in Caterpillar on September 2, 2024 and sell it today you would earn a total of 2,648 from holding Caterpillar or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Caterpillar vs. Evofem Biosciences
Performance |
| Timeline |
| Caterpillar |
| Evofem Biosciences |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Evofem Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Evofem Biosciences
The main advantage of trading using opposite Caterpillar and Evofem Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Evofem Biosciences 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 Evofem Biosciences will offset losses from the drop in Evofem Biosciences' long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| Evofem Biosciences vs. Rivian Automotive | Evofem Biosciences vs. Tesla Inc | Evofem Biosciences vs. PACCAR Inc | Evofem Biosciences vs. Grupo Aeroportuario del |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |