Correlation Between Caterpillar and 444859BT8
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By analyzing existing cross correlation between Caterpillar and HUM 37 23 MAR 29, you can compare the effects of market volatilities on Caterpillar and 444859BT8 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 444859BT8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 444859BT8.
Diversification Opportunities for Caterpillar and 444859BT8
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and 444859BT8 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and HUM 37 23 MAR 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUM 37 23 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 444859BT8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUM 37 23 has no effect on the direction of Caterpillar i.e., Caterpillar and 444859BT8 go up and down completely randomly.
Pair Corralation between Caterpillar and 444859BT8
Considering the 90-day investment horizon Caterpillar is expected to generate 3.42 times more return on investment than 444859BT8. However, Caterpillar is 3.42 times more volatile than HUM 37 23 MAR 29. It trades about 0.09 of its potential returns per unit of risk. HUM 37 23 MAR 29 is currently generating about -0.19 per unit of risk. If you would invest 39,061 in Caterpillar on August 29, 2024 and sell it today you would earn a total of 1,722 from holding Caterpillar or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Caterpillar vs. HUM 37 23 MAR 29
Performance |
| Timeline |
| Caterpillar |
| HUM 37 23 |
Caterpillar and 444859BT8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 444859BT8
The main advantage of trading using opposite Caterpillar and 444859BT8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 444859BT8 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 444859BT8 will offset losses from the drop in 444859BT8's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| 444859BT8 vs. AEP TEX INC | 444859BT8 vs. US BANK NATIONAL | 444859BT8 vs. PayPal Holdings | 444859BT8 vs. IONQ Inc |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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