Correlation Between Caterpillar and Themes Cash
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Themes Cash 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 Themes Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Themes Cash Flow, you can compare the effects of market volatilities on Caterpillar and Themes Cash 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 Themes Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Themes Cash.
Diversification Opportunities for Caterpillar and Themes Cash
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Caterpillar and Themes is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Themes Cash Flow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Cash Flow 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 Themes Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Cash Flow has no effect on the direction of Caterpillar i.e., Caterpillar and Themes Cash go up and down completely randomly.
Pair Corralation between Caterpillar and Themes Cash
Considering the 90-day investment horizon Caterpillar is expected to generate 2.27 times less return on investment than Themes Cash. In addition to that, Caterpillar is 2.04 times more volatile than Themes Cash Flow. It trades about 0.02 of its total potential returns per unit of risk. Themes Cash Flow is currently generating about 0.1 per unit of volatility. If you would invest 2,739 in Themes Cash Flow on November 28, 2024 and sell it today you would earn a total of 437.00 from holding Themes Cash Flow or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.72% |
| Values | Daily Returns |
Caterpillar vs. Themes Cash Flow
Performance |
| Timeline |
| Caterpillar |
| Themes Cash Flow |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Caterpillar and Themes Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Themes Cash
The main advantage of trading using opposite Caterpillar and Themes Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Themes Cash 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 Themes Cash will offset losses from the drop in Themes Cash's long position.| Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
| Themes Cash vs. FT Vest Equity | Themes Cash vs. Zillow Group Class | Themes Cash vs. Northern Lights | Themes Cash vs. VanEck Vectors Moodys |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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