Correlation Between Caterpillar and FORTIVE
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By analyzing existing cross correlation between Caterpillar and FORTIVE P 315, you can compare the effects of market volatilities on Caterpillar and FORTIVE 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 FORTIVE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and FORTIVE.
Diversification Opportunities for Caterpillar and FORTIVE
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Caterpillar and FORTIVE is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and FORTIVE P 315 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTIVE P 315 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 FORTIVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTIVE P 315 has no effect on the direction of Caterpillar i.e., Caterpillar and FORTIVE go up and down completely randomly.
Pair Corralation between Caterpillar and FORTIVE
Considering the 90-day investment horizon Caterpillar is expected to generate 20.67 times more return on investment than FORTIVE. However, Caterpillar is 20.67 times more volatile than FORTIVE P 315. It trades about 0.05 of its potential returns per unit of risk. FORTIVE P 315 is currently generating about 0.05 per unit of risk. If you would invest 35,975 in Caterpillar on November 9, 2024 and sell it today you would earn a total of 570.00 from holding Caterpillar or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Caterpillar vs. FORTIVE P 315
Performance |
| Timeline |
| Caterpillar |
| FORTIVE P 315 |
Caterpillar and FORTIVE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and FORTIVE
The main advantage of trading using opposite Caterpillar and FORTIVE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, FORTIVE 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 FORTIVE will offset losses from the drop in FORTIVE's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| FORTIVE vs. Orbit Garant Drilling | FORTIVE vs. Old Republic International | FORTIVE vs. Direct Line Insurance | FORTIVE vs. Pekin Life Insurance |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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