Correlation Between Caterpillar and 86787GAJ1

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Caterpillar and 86787GAJ1 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Caterpillar and 86787GAJ1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and SUNTRUST BK ATLANTA, you can compare the effects of market volatilities on Caterpillar and 86787GAJ1 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 86787GAJ1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 86787GAJ1.

Diversification Opportunities for Caterpillar and 86787GAJ1

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Caterpillar and 86787GAJ1 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and SUNTRUST BK ATLANTA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNTRUST BK ATLANTA 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 86787GAJ1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNTRUST BK ATLANTA has no effect on the direction of Caterpillar i.e., Caterpillar and 86787GAJ1 go up and down completely randomly.

Pair Corralation between Caterpillar and 86787GAJ1

Considering the 90-day investment horizon Caterpillar is expected to generate 6.84 times more return on investment than 86787GAJ1. However, Caterpillar is 6.84 times more volatile than SUNTRUST BK ATLANTA. It trades about 0.11 of its potential returns per unit of risk. SUNTRUST BK ATLANTA is currently generating about 0.04 per unit of risk. If you would invest  25,680  in Caterpillar on September 4, 2024 and sell it today you would earn a total of  14,246  from holding Caterpillar or generate 55.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.98%
ValuesDaily Returns

Caterpillar  vs.  SUNTRUST BK ATLANTA

 Performance 
       Timeline  
Caterpillar 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Caterpillar are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Caterpillar unveiled solid returns over the last few months and may actually be approaching a breakup point.
SUNTRUST BK ATLANTA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SUNTRUST BK ATLANTA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 86787GAJ1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Caterpillar and 86787GAJ1 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Caterpillar and 86787GAJ1

The main advantage of trading using opposite Caterpillar and 86787GAJ1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 86787GAJ1 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 86787GAJ1 will offset losses from the drop in 86787GAJ1's long position.
Caterpillar vs. AGCO Corporation
Caterpillar vs. Deere Company
Caterpillar vs. Lindsay
Caterpillar vs. Lion Electric Corp
The idea behind Caterpillar and SUNTRUST BK ATLANTA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
86787GAJ1 vs. AEP TEX INC
86787GAJ1 vs. US BANK NATIONAL
86787GAJ1 vs. Jackson Financial
86787GAJ1 vs. MetLife
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Transaction History
View history of all your transactions and understand their impact on performance


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY