Correlation Between Caterpillar and 828807DT1
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By analyzing existing cross correlation between Caterpillar and SPG 265 01 FEB 32, you can compare the effects of market volatilities on Caterpillar and 828807DT1 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 828807DT1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 828807DT1.
Diversification Opportunities for Caterpillar and 828807DT1
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and 828807DT1 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and SPG 265 01 FEB 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPG 265 01 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 828807DT1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPG 265 01 has no effect on the direction of Caterpillar i.e., Caterpillar and 828807DT1 go up and down completely randomly.
Pair Corralation between Caterpillar and 828807DT1
Considering the 90-day investment horizon Caterpillar is expected to generate 3.96 times more return on investment than 828807DT1. However, Caterpillar is 3.96 times more volatile than SPG 265 01 FEB 32. It trades about 0.06 of its potential returns per unit of risk. SPG 265 01 FEB 32 is currently generating about 0.07 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 | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Caterpillar vs. SPG 265 01 FEB 32
Performance |
| Timeline |
| Caterpillar |
| SPG 265 01 |
Caterpillar and 828807DT1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 828807DT1
The main advantage of trading using opposite Caterpillar and 828807DT1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 828807DT1 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 828807DT1 will offset losses from the drop in 828807DT1's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| 828807DT1 vs. AerCap Holdings NV | 828807DT1 vs. Triton International Limited | 828807DT1 vs. China Aircraft Leasing | 828807DT1 vs. Aldel Financial II |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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