Correlation Between Grow Solutions and Caterpillar
Can any of the company-specific risk be diversified away by investing in both Grow Solutions and Caterpillar 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 Grow Solutions and Caterpillar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grow Solutions Holdings and Caterpillar, you can compare the effects of market volatilities on Grow Solutions 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 Grow Solutions with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grow Solutions and Caterpillar.
Diversification Opportunities for Grow Solutions and Caterpillar
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grow and Caterpillar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grow Solutions Holdings and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and Grow Solutions 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 Grow Solutions Holdings 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 has no effect on the direction of Grow Solutions i.e., Grow Solutions and Caterpillar go up and down completely randomly.
Pair Corralation between Grow Solutions and Caterpillar
If you would invest 34,695 in Caterpillar on August 28, 2024 and sell it today you would earn a total of 5,870 from holding Caterpillar or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Grow Solutions Holdings vs. Caterpillar
Performance |
| Timeline |
| Grow Solutions Holdings |
| Caterpillar |
Grow Solutions and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grow Solutions and Caterpillar
The main advantage of trading using opposite Grow Solutions and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grow Solutions 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.| Grow Solutions vs. FitLife Brands, Common | Grow Solutions vs. HUMANA INC | Grow Solutions vs. SCOR PK | Grow Solutions vs. Aquagold International |
| Caterpillar vs. Lion Electric Corp | Caterpillar vs. Xos Inc | Caterpillar vs. Hydrofarm Holdings Group | Caterpillar vs. AGCO Corporation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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