Correlation Between Caterpillar and Medigene
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Medigene 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 Medigene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Medigene AG, you can compare the effects of market volatilities on Caterpillar and Medigene 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 Medigene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Medigene.
Diversification Opportunities for Caterpillar and Medigene
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and Medigene is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Medigene AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medigene AG 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 Medigene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medigene AG has no effect on the direction of Caterpillar i.e., Caterpillar and Medigene go up and down completely randomly.
Pair Corralation between Caterpillar and Medigene
If you would invest 259.00 in Medigene AG on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Medigene AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Caterpillar vs. Medigene AG
Performance |
| Timeline |
| Caterpillar |
| Medigene AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Medigene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Medigene
The main advantage of trading using opposite Caterpillar and Medigene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Medigene 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 Medigene will offset losses from the drop in Medigene's long position.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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