Correlation Between Caterpillar and 459200KU4
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By analyzing existing cross correlation between Caterpillar and IBM 44 27 JUL 32, you can compare the effects of market volatilities on Caterpillar and 459200KU4 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 459200KU4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 459200KU4.
Diversification Opportunities for Caterpillar and 459200KU4
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and 459200KU4 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and IBM 44 27 JUL 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBM 44 27 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 459200KU4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBM 44 27 has no effect on the direction of Caterpillar i.e., Caterpillar and 459200KU4 go up and down completely randomly.
Pair Corralation between Caterpillar and 459200KU4
Considering the 90-day investment horizon Caterpillar is expected to generate 5.44 times more return on investment than 459200KU4. However, Caterpillar is 5.44 times more volatile than IBM 44 27 JUL 32. It trades about 0.06 of its potential returns per unit of risk. IBM 44 27 JUL 32 is currently generating about -0.19 per unit of risk. If you would invest 38,706 in Caterpillar on August 25, 2024 and sell it today you would earn a total of 1,043 from holding Caterpillar or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Caterpillar vs. IBM 44 27 JUL 32
Performance |
| Timeline |
| Caterpillar |
| IBM 44 27 |
Caterpillar and 459200KU4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 459200KU4
The main advantage of trading using opposite Caterpillar and 459200KU4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 459200KU4 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 459200KU4 will offset losses from the drop in 459200KU4's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| 459200KU4 vs. Ambev SA ADR | 459200KU4 vs. Digi International | 459200KU4 vs. Celsius Holdings | 459200KU4 vs. Anterix |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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