Correlation Between Caterpillar and 55336VAM2
Specify exactly 2 symbols:
By analyzing existing cross correlation between Caterpillar and MPLX LP 45, you can compare the effects of market volatilities on Caterpillar and 55336VAM2 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 55336VAM2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 55336VAM2.
Diversification Opportunities for Caterpillar and 55336VAM2
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and 55336VAM2 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and MPLX LP 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPLX LP 45 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 55336VAM2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPLX LP 45 has no effect on the direction of Caterpillar i.e., Caterpillar and 55336VAM2 go up and down completely randomly.
Pair Corralation between Caterpillar and 55336VAM2
Considering the 90-day investment horizon Caterpillar is expected to generate 2.15 times more return on investment than 55336VAM2. However, Caterpillar is 2.15 times more volatile than MPLX LP 45. It trades about 0.08 of its potential returns per unit of risk. MPLX LP 45 is currently generating about 0.0 per unit of risk. If you would invest 22,712 in Caterpillar on September 3, 2024 and sell it today you would earn a total of 17,899 from holding Caterpillar or generate 78.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.18% |
| Values | Daily Returns |
Caterpillar vs. MPLX LP 45
Performance |
| Timeline |
| Caterpillar |
| MPLX LP 45 |
Caterpillar and 55336VAM2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 55336VAM2
The main advantage of trading using opposite Caterpillar and 55336VAM2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 55336VAM2 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 55336VAM2 will offset losses from the drop in 55336VAM2's long position.| Caterpillar vs. Partner Communications | Caterpillar vs. Merck Company | Caterpillar vs. Western Midstream Partners | Caterpillar vs. Edgewise Therapeutics |
| 55336VAM2 vs. Tandy Leather Factory | 55336VAM2 vs. American Eagle Outfitters | 55336VAM2 vs. Ross Stores | 55336VAM2 vs. United Parks Resorts |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |