Correlation Between Caterpillar and Matthews International
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Matthews International 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 Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Matthews International Funds, you can compare the effects of market volatilities on Caterpillar and Matthews International 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 Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Matthews International.
Diversification Opportunities for Caterpillar and Matthews International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Matthews is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Matthews International Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International 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 Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Caterpillar i.e., Caterpillar and Matthews International go up and down completely randomly.
Pair Corralation between Caterpillar and Matthews International
If you would invest 38,706 in Caterpillar on August 25, 2024 and sell it today you would earn a total of 1,043 from holding Caterpillar or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Caterpillar vs. Matthews International Funds
Performance |
| Timeline |
| Caterpillar |
| Matthews International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Matthews International
The main advantage of trading using opposite Caterpillar and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Matthews International 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 Matthews International will offset losses from the drop in Matthews International's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| Matthews International vs. Freedom Day Dividend | Matthews International vs. Davis Select International | Matthews International vs. iShares MSCI China | Matthews International vs. SmartETFs Dividend Builder |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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