Correlation Between Caterpillar and MASCO
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By analyzing existing cross correlation between Caterpillar and MASCO P 775, you can compare the effects of market volatilities on Caterpillar and MASCO 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 MASCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and MASCO.
Diversification Opportunities for Caterpillar and MASCO
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and MASCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and MASCO P 775 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASCO P 775 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 MASCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASCO P 775 has no effect on the direction of Caterpillar i.e., Caterpillar and MASCO go up and down completely randomly.
Pair Corralation between Caterpillar and MASCO
If you would invest 0.00 in MASCO P 775 on November 29, 2024 and sell it today you would earn a total of 0.00 from holding MASCO P 775 or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Caterpillar vs. MASCO P 775
Performance |
| Timeline |
| Caterpillar |
| MASCO P 775 |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Caterpillar and MASCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and MASCO
The main advantage of trading using opposite Caterpillar and MASCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, MASCO 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 MASCO will offset losses from the drop in MASCO's long position.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
| MASCO vs. Allegiant Travel | MASCO vs. Ecolab Inc | MASCO vs. Ryanair Holdings PLC | MASCO vs. LATAM Airlines Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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