Correlation Between Caterpillar and Nevada Copper
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Nevada Copper 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 Nevada Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Nevada Copper Corp, you can compare the effects of market volatilities on Caterpillar and Nevada Copper 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 Nevada Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Nevada Copper.
Diversification Opportunities for Caterpillar and Nevada Copper
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Nevada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Nevada Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada Copper Corp 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 Nevada Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada Copper Corp has no effect on the direction of Caterpillar i.e., Caterpillar and Nevada Copper go up and down completely randomly.
Pair Corralation between Caterpillar and Nevada Copper
If you would invest (100.00) in Nevada Copper Corp on November 27, 2024 and sell it today you would earn a total of 100.00 from holding Nevada Copper Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Caterpillar vs. Nevada Copper Corp
Performance |
| Timeline |
| Caterpillar |
| Nevada Copper Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Caterpillar and Nevada Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Nevada Copper
The main advantage of trading using opposite Caterpillar and Nevada Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Nevada Copper 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 Nevada Copper will offset losses from the drop in Nevada Copper's long position.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
| Nevada Copper vs. Ero Copper Corp | Nevada Copper vs. Copperbank Resources Corp | Nevada Copper vs. Copper Mountain Mining | Nevada Copper vs. CopperCorp Resources |
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 Stocks Directory module to find actively traded stocks across global markets.
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