Correlation Between Caterpillar and 92826CAH5
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By analyzing existing cross correlation between Caterpillar and VISA INC 275, you can compare the effects of market volatilities on Caterpillar and 92826CAH5 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 92826CAH5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 92826CAH5.
Diversification Opportunities for Caterpillar and 92826CAH5
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and 92826CAH5 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and VISA INC 275 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VISA INC 275 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 92826CAH5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VISA INC 275 has no effect on the direction of Caterpillar i.e., Caterpillar and 92826CAH5 go up and down completely randomly.
Pair Corralation between Caterpillar and 92826CAH5
Considering the 90-day investment horizon Caterpillar is expected to generate 2.63 times more return on investment than 92826CAH5. However, Caterpillar is 2.63 times more volatile than VISA INC 275. It trades about 0.12 of its potential returns per unit of risk. VISA INC 275 is currently generating about 0.01 per unit of risk. If you would invest 24,551 in Caterpillar on August 25, 2024 and sell it today you would earn a total of 15,198 from holding Caterpillar or generate 61.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.4% |
| Values | Daily Returns |
Caterpillar vs. VISA INC 275
Performance |
| Timeline |
| Caterpillar |
| VISA INC 275 |
Caterpillar and 92826CAH5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 92826CAH5
The main advantage of trading using opposite Caterpillar and 92826CAH5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 92826CAH5 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 92826CAH5 will offset losses from the drop in 92826CAH5's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| 92826CAH5 vs. Nabors Industries | 92826CAH5 vs. Plexus Corp | 92826CAH5 vs. Transocean | 92826CAH5 vs. Nextnav Acquisition Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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