Correlation Between Caterpillar and Cambria Trinity
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Cambria Trinity 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 Cambria Trinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Cambria Trinity ETF, you can compare the effects of market volatilities on Caterpillar and Cambria Trinity 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 Cambria Trinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Cambria Trinity.
Diversification Opportunities for Caterpillar and Cambria Trinity
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caterpillar and Cambria is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Cambria Trinity ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Trinity ETF 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 Cambria Trinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Trinity ETF has no effect on the direction of Caterpillar i.e., Caterpillar and Cambria Trinity go up and down completely randomly.
Pair Corralation between Caterpillar and Cambria Trinity
Considering the 90-day investment horizon Caterpillar is expected to under-perform the Cambria Trinity. In addition to that, Caterpillar is 3.62 times more volatile than Cambria Trinity ETF. It trades about -0.45 of its total potential returns per unit of risk. Cambria Trinity ETF is currently generating about -0.07 per unit of volatility. If you would invest 2,583 in Cambria Trinity ETF on November 28, 2024 and sell it today you would lose (16.00) from holding Cambria Trinity ETF or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caterpillar vs. Cambria Trinity ETF
Performance |
| Timeline |
| Caterpillar |
| Cambria Trinity ETF |
Caterpillar and Cambria Trinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Cambria Trinity
The main advantage of trading using opposite Caterpillar and Cambria Trinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Cambria Trinity 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 Cambria Trinity will offset losses from the drop in Cambria Trinity's long position.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
| Cambria Trinity vs. Cambria Global Asset | Cambria Trinity vs. Cambria Global Momentum | Cambria Trinity vs. Cambria Emerging Shareholder | Cambria Trinity vs. Cambria Value and |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |