Correlation Between Ideanomics and Caterpillar
Can any of the company-specific risk be diversified away by investing in both Ideanomics 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 Ideanomics and Caterpillar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ideanomics and Caterpillar, you can compare the effects of market volatilities on Ideanomics 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 Ideanomics with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ideanomics and Caterpillar.
Diversification Opportunities for Ideanomics and Caterpillar
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ideanomics and Caterpillar is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ideanomics and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and Ideanomics 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 Ideanomics 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 Ideanomics i.e., Ideanomics and Caterpillar go up and down completely randomly.
Pair Corralation between Ideanomics and Caterpillar
If you would invest 39,061 in Caterpillar on August 27, 2024 and sell it today you would earn a total of 688.00 from holding Caterpillar or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ideanomics vs. Caterpillar
Performance |
| Timeline |
| Ideanomics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Caterpillar |
Ideanomics and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ideanomics and Caterpillar
The main advantage of trading using opposite Ideanomics and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ideanomics 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.| Ideanomics vs. Deere Company | Ideanomics vs. Caterpillar | Ideanomics vs. Lion Electric Corp | Ideanomics vs. Xos Inc |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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