Correlation Between Dow Jones and CATERPILLAR
Specify exactly 2 symbols:
By analyzing existing cross correlation between Dow Jones Industrial and CATERPILLAR FINANCIAL SERVICES, you can compare the effects of market volatilities on Dow Jones and CATERPILLAR 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 Dow Jones with a short position of CATERPILLAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and CATERPILLAR.
Diversification Opportunities for Dow Jones and CATERPILLAR
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and CATERPILLAR is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CATERPILLAR FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATERPILLAR FINANCIAL and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with CATERPILLAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATERPILLAR FINANCIAL has no effect on the direction of Dow Jones i.e., Dow Jones and CATERPILLAR go up and down completely randomly.
Pair Corralation between Dow Jones and CATERPILLAR
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the CATERPILLAR. In addition to that, Dow Jones is 4.63 times more volatile than CATERPILLAR FINANCIAL SERVICES. It trades about -0.16 of its total potential returns per unit of risk. CATERPILLAR FINANCIAL SERVICES is currently generating about 0.1 per unit of volatility. If you would invest 9,629 in CATERPILLAR FINANCIAL SERVICES on December 1, 2024 and sell it today you would earn a total of 31.00 from holding CATERPILLAR FINANCIAL SERVICES or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. CATERPILLAR FINANCIAL SERVICES
Performance |
| Timeline |
Dow Jones and CATERPILLAR Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CATERPILLAR FINANCIAL SERVICES
Pair trading matchups for CATERPILLAR
Pair Trading with Dow Jones and CATERPILLAR
The main advantage of trading using opposite Dow Jones and CATERPILLAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, CATERPILLAR 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 CATERPILLAR will offset losses from the drop in CATERPILLAR's long position.| Dow Jones vs. Cannae Holdings | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. SEI Investments | Dow Jones vs. Cracker Barrel Old |
| CATERPILLAR vs. AEP TEX INC | CATERPILLAR vs. iShares Global Consumer | CATERPILLAR vs. Caterpillar | CATERPILLAR vs. 3M Company |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |