Correlation Between Caterpillar and 842587DL8
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By analyzing existing cross correlation between Caterpillar and SO 57 15 OCT 32, you can compare the effects of market volatilities on Caterpillar and 842587DL8 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 842587DL8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 842587DL8.
Diversification Opportunities for Caterpillar and 842587DL8
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and 842587DL8 is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and SO 57 15 OCT 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 842587DL8 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 842587DL8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 842587DL8 has no effect on the direction of Caterpillar i.e., Caterpillar and 842587DL8 go up and down completely randomly.
Pair Corralation between Caterpillar and 842587DL8
Considering the 90-day investment horizon Caterpillar is expected to generate 2.47 times more return on investment than 842587DL8. However, Caterpillar is 2.47 times more volatile than SO 57 15 OCT 32. It trades about 0.08 of its potential returns per unit of risk. SO 57 15 OCT 32 is currently generating about -0.01 per unit of risk. If you would invest 22,084 in Caterpillar on August 28, 2024 and sell it today you would earn a total of 18,699 from holding Caterpillar or generate 84.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.36% |
| Values | Daily Returns |
Caterpillar vs. SO 57 15 OCT 32
Performance |
| Timeline |
| Caterpillar |
| 842587DL8 |
Caterpillar and 842587DL8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 842587DL8
The main advantage of trading using opposite Caterpillar and 842587DL8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 842587DL8 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 842587DL8 will offset losses from the drop in 842587DL8's long position.| Caterpillar vs. Lion Electric Corp | Caterpillar vs. Xos Inc | Caterpillar vs. Hydrofarm Holdings Group | Caterpillar vs. AGCO Corporation |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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