Correlation Between Caterpillar and DEUTSCHE
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By analyzing existing cross correlation between Caterpillar and DEUTSCHE BANK AG, you can compare the effects of market volatilities on Caterpillar and DEUTSCHE 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 DEUTSCHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and DEUTSCHE.
Diversification Opportunities for Caterpillar and DEUTSCHE
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and DEUTSCHE is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and DEUTSCHE BANK AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE BANK AG 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 DEUTSCHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE BANK AG has no effect on the direction of Caterpillar i.e., Caterpillar and DEUTSCHE go up and down completely randomly.
Pair Corralation between Caterpillar and DEUTSCHE
Considering the 90-day investment horizon Caterpillar is expected to generate 10.47 times more return on investment than DEUTSCHE. However, Caterpillar is 10.47 times more volatile than DEUTSCHE BANK AG. It trades about 0.07 of its potential returns per unit of risk. DEUTSCHE BANK AG is currently generating about 0.11 per unit of risk. If you would invest 27,745 in Caterpillar on October 14, 2024 and sell it today you would earn a total of 7,355 from holding Caterpillar or generate 26.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.63% |
| Values | Daily Returns |
Caterpillar vs. DEUTSCHE BANK AG
Performance |
| Timeline |
| Caterpillar |
| DEUTSCHE BANK AG |
Caterpillar and DEUTSCHE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and DEUTSCHE
The main advantage of trading using opposite Caterpillar and DEUTSCHE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, DEUTSCHE 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 DEUTSCHE will offset losses from the drop in DEUTSCHE's long position.| Caterpillar vs. Deere Company | Caterpillar vs. GreenPower Motor | Caterpillar vs. Hyster Yale Materials Handling | Caterpillar vs. CEA Industries Warrant |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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