Correlation Between Caterpillar and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Pacific Funds 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 Pacific Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Pacific Funds Smallmid Cap, you can compare the effects of market volatilities on Caterpillar and Pacific Funds 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 Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Pacific Funds.
Diversification Opportunities for Caterpillar and Pacific Funds
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and Pacific is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Pacific Funds Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Smallmid 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Smallmid has no effect on the direction of Caterpillar i.e., Caterpillar and Pacific Funds go up and down completely randomly.
Pair Corralation between Caterpillar and Pacific Funds
If you would invest 24,650 in Caterpillar on September 14, 2024 and sell it today you would earn a total of 13,398 from holding Caterpillar or generate 54.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.37% |
| Values | Daily Returns |
Caterpillar vs. Pacific Funds Smallmid Cap
Performance |
| Timeline |
| Caterpillar |
| Pacific Funds Smallmid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Pacific Funds
The main advantage of trading using opposite Caterpillar and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
| Pacific Funds vs. Angel Oak Financial | Pacific Funds vs. Royce Global Financial | Pacific Funds vs. Mesirow Financial Small | Pacific Funds vs. 1919 Financial Services |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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