Correlation Between Caterpillar and ABBOTT
Specify exactly 2 symbols:
By analyzing existing cross correlation between Caterpillar and ABBOTT LABORATORIES 615, you can compare the effects of market volatilities on Caterpillar and ABBOTT 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 ABBOTT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and ABBOTT.
Diversification Opportunities for Caterpillar and ABBOTT
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and ABBOTT is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and ABBOTT LABORATORIES 615 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABBOTT LABORATORIES 615 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 ABBOTT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABBOTT LABORATORIES 615 has no effect on the direction of Caterpillar i.e., Caterpillar and ABBOTT go up and down completely randomly.
Pair Corralation between Caterpillar and ABBOTT
Considering the 90-day investment horizon Caterpillar is expected to generate 2.03 times more return on investment than ABBOTT. However, Caterpillar is 2.03 times more volatile than ABBOTT LABORATORIES 615. It trades about 0.12 of its potential returns per unit of risk. ABBOTT LABORATORIES 615 is currently generating about -0.01 per unit of risk. If you would invest 25,335 in Caterpillar on September 2, 2024 and sell it today you would earn a total of 15,276 from holding Caterpillar or generate 60.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.71% |
| Values | Daily Returns |
Caterpillar vs. ABBOTT LABORATORIES 615
Performance |
| Timeline |
| Caterpillar |
| ABBOTT LABORATORIES 615 |
Caterpillar and ABBOTT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and ABBOTT
The main advantage of trading using opposite Caterpillar and ABBOTT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, ABBOTT 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 ABBOTT will offset losses from the drop in ABBOTT's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
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.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance |