Correlation Between Caterpillar and Global Nterpoint
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Global Nterpoint 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 Global Nterpoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Global Nterpoint Portfolio, you can compare the effects of market volatilities on Caterpillar and Global Nterpoint 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 Global Nterpoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Global Nterpoint.
Diversification Opportunities for Caterpillar and Global Nterpoint
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caterpillar and Global is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Global Nterpoint Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Nterpoint Por 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 Global Nterpoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Nterpoint Por has no effect on the direction of Caterpillar i.e., Caterpillar and Global Nterpoint go up and down completely randomly.
Pair Corralation between Caterpillar and Global Nterpoint
If you would invest 39,061 in Caterpillar on August 28, 2024 and sell it today you would earn a total of 1,722 from holding Caterpillar or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Caterpillar vs. Global Nterpoint Portfolio
Performance |
| Timeline |
| Caterpillar |
| Global Nterpoint Por |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Global Nterpoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Global Nterpoint
The main advantage of trading using opposite Caterpillar and Global Nterpoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Global Nterpoint 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 Global Nterpoint will offset losses from the drop in Global Nterpoint's long position.| Caterpillar vs. Lion Electric Corp | Caterpillar vs. Xos Inc | Caterpillar vs. Hydrofarm Holdings Group | Caterpillar vs. AGCO Corporation |
| Global Nterpoint vs. Invesco Vertible Securities | Global Nterpoint vs. Mainstay Vertible Fund | Global Nterpoint vs. Teton Vertible Securities | Global Nterpoint vs. Invesco Vertible Securities |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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