Correlation Between Caterpillar and HLNLN
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By analyzing existing cross correlation between Caterpillar and HLNLN 4 24 MAR 52, you can compare the effects of market volatilities on Caterpillar and HLNLN 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 HLNLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and HLNLN.
Diversification Opportunities for Caterpillar and HLNLN
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and HLNLN is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and HLNLN 4 24 MAR 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLNLN 4 24 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 HLNLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLNLN 4 24 has no effect on the direction of Caterpillar i.e., Caterpillar and HLNLN go up and down completely randomly.
Pair Corralation between Caterpillar and HLNLN
Considering the 90-day investment horizon Caterpillar is expected to generate 1.71 times more return on investment than HLNLN. However, Caterpillar is 1.71 times more volatile than HLNLN 4 24 MAR 52. It trades about 0.09 of its potential returns per unit of risk. HLNLN 4 24 MAR 52 is currently generating about -0.2 per unit of risk. If you would invest 38,751 in Caterpillar on August 30, 2024 and sell it today you would earn a total of 1,619 from holding Caterpillar or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
Caterpillar vs. HLNLN 4 24 MAR 52
Performance |
| Timeline |
| Caterpillar |
| HLNLN 4 24 |
Caterpillar and HLNLN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and HLNLN
The main advantage of trading using opposite Caterpillar and HLNLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, HLNLN 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 HLNLN will offset losses from the drop in HLNLN's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| HLNLN vs. Herc Holdings | HLNLN vs. Yuexiu Transport Infrastructure | HLNLN vs. Summit Materials | HLNLN vs. Air Lease |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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