Correlation Between Caterpillar and FEDEX
Specify exactly 2 symbols:
By analyzing existing cross correlation between Caterpillar and FEDEX P 42, you can compare the effects of market volatilities on Caterpillar and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and FEDEX.
Diversification Opportunities for Caterpillar and FEDEX
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and FEDEX is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and FEDEX P 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 42 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 42 has no effect on the direction of Caterpillar i.e., Caterpillar and FEDEX go up and down completely randomly.
Pair Corralation between Caterpillar and FEDEX
Considering the 90-day investment horizon Caterpillar is expected to generate 1.38 times more return on investment than FEDEX. However, Caterpillar is 1.38 times more volatile than FEDEX P 42. It trades about 0.1 of its potential returns per unit of risk. FEDEX P 42 is currently generating about 0.0 per unit of risk. If you would invest 32,883 in Caterpillar on September 1, 2024 and sell it today you would earn a total of 7,728 from holding Caterpillar or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Caterpillar vs. FEDEX P 42
Performance |
| Timeline |
| Caterpillar |
| FEDEX P 42 |
Caterpillar and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and FEDEX
The main advantage of trading using opposite Caterpillar and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |