Correlation Between Caterpillar and ALLTEL
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By analyzing existing cross correlation between Caterpillar and ALLTEL P 68, you can compare the effects of market volatilities on Caterpillar and ALLTEL 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 ALLTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and ALLTEL.
Diversification Opportunities for Caterpillar and ALLTEL
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and ALLTEL is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and ALLTEL P 68 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLTEL P 68 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 ALLTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLTEL P 68 has no effect on the direction of Caterpillar i.e., Caterpillar and ALLTEL go up and down completely randomly.
Pair Corralation between Caterpillar and ALLTEL
Considering the 90-day investment horizon Caterpillar is expected to under-perform the ALLTEL. In addition to that, Caterpillar is 1.21 times more volatile than ALLTEL P 68. It trades about -0.11 of its total potential returns per unit of risk. ALLTEL P 68 is currently generating about -0.02 per unit of volatility. If you would invest 10,542 in ALLTEL P 68 on November 7, 2024 and sell it today you would lose (57.00) from holding ALLTEL P 68 or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.12% |
| Values | Daily Returns |
Caterpillar vs. ALLTEL P 68
Performance |
| Timeline |
| Caterpillar |
| ALLTEL P 68 |
Caterpillar and ALLTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and ALLTEL
The main advantage of trading using opposite Caterpillar and ALLTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, ALLTEL 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 ALLTEL will offset losses from the drop in ALLTEL's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| ALLTEL vs. Portillos | ALLTEL vs. One Group Hospitality | ALLTEL vs. Integral Ad Science | ALLTEL vs. Ballys Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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