Correlation Between Caterpillar and Wavedancer
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Wavedancer 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 Wavedancer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Wavedancer, you can compare the effects of market volatilities on Caterpillar and Wavedancer 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 Wavedancer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Wavedancer.
Diversification Opportunities for Caterpillar and Wavedancer
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caterpillar and Wavedancer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Wavedancer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wavedancer 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 Wavedancer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wavedancer has no effect on the direction of Caterpillar i.e., Caterpillar and Wavedancer go up and down completely randomly.
Pair Corralation between Caterpillar and Wavedancer
If you would invest 38,972 in Caterpillar on August 31, 2024 and sell it today you would earn a total of 1,398 from holding Caterpillar or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Caterpillar vs. Wavedancer
Performance |
| Timeline |
| Caterpillar |
| Wavedancer |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Wavedancer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Wavedancer
The main advantage of trading using opposite Caterpillar and Wavedancer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Wavedancer 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 Wavedancer will offset losses from the drop in Wavedancer's long position.| Caterpillar vs. Deere Company | Caterpillar vs. Lindsay | Caterpillar vs. Alamo Group | Caterpillar vs. Manitowoc |
| Wavedancer vs. TTEC Holdings | Wavedancer vs. Widepoint C | Wavedancer vs. CLPS Inc | Wavedancer vs. Usio Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |