Correlation Between Caterpillar and ProMIS Neurosciences
Can any of the company-specific risk be diversified away by investing in both Caterpillar and ProMIS Neurosciences 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 ProMIS Neurosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and ProMIS Neurosciences, you can compare the effects of market volatilities on Caterpillar and ProMIS Neurosciences 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 ProMIS Neurosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and ProMIS Neurosciences.
Diversification Opportunities for Caterpillar and ProMIS Neurosciences
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and ProMIS is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and ProMIS Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProMIS Neurosciences 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 ProMIS Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProMIS Neurosciences has no effect on the direction of Caterpillar i.e., Caterpillar and ProMIS Neurosciences go up and down completely randomly.
Pair Corralation between Caterpillar and ProMIS Neurosciences
Considering the 90-day investment horizon Caterpillar is expected to generate 0.31 times more return on investment than ProMIS Neurosciences. However, Caterpillar is 3.21 times less risky than ProMIS Neurosciences. It trades about 0.1 of its potential returns per unit of risk. ProMIS Neurosciences is currently generating about -0.07 per unit of risk. If you would invest 33,594 in Caterpillar on August 29, 2024 and sell it today you would earn a total of 7,189 from holding Caterpillar or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caterpillar vs. ProMIS Neurosciences
Performance |
| Timeline |
| Caterpillar |
| ProMIS Neurosciences |
Caterpillar and ProMIS Neurosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and ProMIS Neurosciences
The main advantage of trading using opposite Caterpillar and ProMIS Neurosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, ProMIS Neurosciences 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 ProMIS Neurosciences will offset losses from the drop in ProMIS Neurosciences' long position.| Caterpillar vs. Lion Electric Corp | Caterpillar vs. Xos Inc | Caterpillar vs. Hydrofarm Holdings Group | Caterpillar vs. AGCO Corporation |
| ProMIS Neurosciences vs. biOasis Technologies | ProMIS Neurosciences vs. Zenith Capital Corp | ProMIS Neurosciences vs. Hemogenyx Pharmaceuticals Plc | ProMIS Neurosciences vs. Fennec Pharmaceuticals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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