Correlation Between Caterpillar and 337738BE7
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By analyzing existing cross correlation between Caterpillar and FISV 56 02 MAR 33, you can compare the effects of market volatilities on Caterpillar and 337738BE7 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 337738BE7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 337738BE7.
Diversification Opportunities for Caterpillar and 337738BE7
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and 337738BE7 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and FISV 56 02 MAR 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FISV 56 02 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 337738BE7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FISV 56 02 has no effect on the direction of Caterpillar i.e., Caterpillar and 337738BE7 go up and down completely randomly.
Pair Corralation between Caterpillar and 337738BE7
Considering the 90-day investment horizon Caterpillar is expected to generate 2.92 times more return on investment than 337738BE7. However, Caterpillar is 2.92 times more volatile than FISV 56 02 MAR 33. It trades about 0.16 of its potential returns per unit of risk. FISV 56 02 MAR 33 is currently generating about -0.17 per unit of risk. If you would invest 37,620 in Caterpillar on September 1, 2024 and sell it today you would earn a total of 2,991 from holding Caterpillar or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Caterpillar vs. FISV 56 02 MAR 33
Performance |
| Timeline |
| Caterpillar |
| FISV 56 02 |
Caterpillar and 337738BE7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 337738BE7
The main advantage of trading using opposite Caterpillar and 337738BE7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 337738BE7 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 337738BE7 will offset losses from the drop in 337738BE7's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| 337738BE7 vs. The Coca Cola | 337738BE7 vs. Willamette Valley Vineyards | 337738BE7 vs. Micron Technology | 337738BE7 vs. Advanced Micro Devices |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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