Correlation Between Caterpillar and Heliostar Metals
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Heliostar Metals 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 Heliostar Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Heliostar Metals, you can compare the effects of market volatilities on Caterpillar and Heliostar Metals 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 Heliostar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Heliostar Metals.
Diversification Opportunities for Caterpillar and Heliostar Metals
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and Heliostar is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Heliostar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heliostar Metals 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 Heliostar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heliostar Metals has no effect on the direction of Caterpillar i.e., Caterpillar and Heliostar Metals go up and down completely randomly.
Pair Corralation between Caterpillar and Heliostar Metals
Considering the 90-day investment horizon Caterpillar is expected to generate 4.32 times less return on investment than Heliostar Metals. But when comparing it to its historical volatility, Caterpillar is 3.26 times less risky than Heliostar Metals. It trades about 0.05 of its potential returns per unit of risk. Heliostar Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Heliostar Metals on November 28, 2024 and sell it today you would earn a total of 43.00 from holding Heliostar Metals or generate 238.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caterpillar vs. Heliostar Metals
Performance |
| Timeline |
| Caterpillar |
| Heliostar Metals |
Caterpillar and Heliostar Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Heliostar Metals
The main advantage of trading using opposite Caterpillar and Heliostar Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Heliostar Metals 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 Heliostar Metals will offset losses from the drop in Heliostar Metals' long position.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
| Heliostar Metals vs. Westward Gold | Heliostar Metals vs. Revival Gold | Heliostar Metals vs. Cabral Gold | Heliostar Metals vs. Cassiar Gold Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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