Correlation Between Caterpillar and 404280DV8
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By analyzing existing cross correlation between Caterpillar and HSBC 6254 09 MAR 34, you can compare the effects of market volatilities on Caterpillar and 404280DV8 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 404280DV8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 404280DV8.
Diversification Opportunities for Caterpillar and 404280DV8
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and 404280DV8 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and HSBC 6254 09 MAR 34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC 6254 09 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 404280DV8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC 6254 09 has no effect on the direction of Caterpillar i.e., Caterpillar and 404280DV8 go up and down completely randomly.
Pair Corralation between Caterpillar and 404280DV8
Considering the 90-day investment horizon Caterpillar is expected to generate 4.46 times more return on investment than 404280DV8. However, Caterpillar is 4.46 times more volatile than HSBC 6254 09 MAR 34. It trades about 0.08 of its potential returns per unit of risk. HSBC 6254 09 MAR 34 is currently generating about -0.3 per unit of risk. If you would invest 39,061 in Caterpillar on August 28, 2024 and sell it today you would earn a total of 1,504 from holding Caterpillar or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Caterpillar vs. HSBC 6254 09 MAR 34
Performance |
| Timeline |
| Caterpillar |
| HSBC 6254 09 |
Caterpillar and 404280DV8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 404280DV8
The main advantage of trading using opposite Caterpillar and 404280DV8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 404280DV8 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 404280DV8 will offset losses from the drop in 404280DV8's long position.| Caterpillar vs. Lion Electric Corp | Caterpillar vs. Xos Inc | Caterpillar vs. Hydrofarm Holdings Group | Caterpillar vs. AGCO Corporation |
| 404280DV8 vs. AEP TEX INC | 404280DV8 vs. US BANK NATIONAL | 404280DV8 vs. 3M Company | 404280DV8 vs. Alcoa Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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