Correlation Between Caterpillar and 012653AE1
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By analyzing existing cross correlation between Caterpillar and ALB 505 01 JUN 32, you can compare the effects of market volatilities on Caterpillar and 012653AE1 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 012653AE1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 012653AE1.
Diversification Opportunities for Caterpillar and 012653AE1
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and 012653AE1 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and ALB 505 01 JUN 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALB 505 01 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 012653AE1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALB 505 01 has no effect on the direction of Caterpillar i.e., Caterpillar and 012653AE1 go up and down completely randomly.
Pair Corralation between Caterpillar and 012653AE1
Considering the 90-day investment horizon Caterpillar is expected to generate 2.13 times more return on investment than 012653AE1. However, Caterpillar is 2.13 times more volatile than ALB 505 01 JUN 32. It trades about 0.07 of its potential returns per unit of risk. ALB 505 01 JUN 32 is currently generating about 0.0 per unit of risk. If you would invest 33,021 in Caterpillar on August 27, 2024 and sell it today you would earn a total of 6,728 from holding Caterpillar or generate 20.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.94% |
| Values | Daily Returns |
Caterpillar vs. ALB 505 01 JUN 32
Performance |
| Timeline |
| Caterpillar |
| ALB 505 01 |
Caterpillar and 012653AE1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 012653AE1
The main advantage of trading using opposite Caterpillar and 012653AE1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 012653AE1 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 012653AE1 will offset losses from the drop in 012653AE1's long position.| Caterpillar vs. Lion Electric Corp | Caterpillar vs. Xos Inc | Caterpillar vs. Hydrofarm Holdings Group | Caterpillar vs. AGCO Corporation |
| 012653AE1 vs. Air Products and | 012653AE1 vs. Balchem | 012653AE1 vs. Titan Machinery | 012653AE1 vs. Hawkins |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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