Correlation Between Metso Outotec and Caterpillar
Specify exactly 2 symbols:
By analyzing existing cross correlation between Metso Outotec Oyj and Caterpillar, you can compare the effects of market volatilities on Metso Outotec 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 Metso Outotec with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metso Outotec and Caterpillar.
Diversification Opportunities for Metso Outotec and Caterpillar
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metso and Caterpillar is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Metso Outotec Oyj and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and Metso Outotec 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 Metso Outotec Oyj 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 Metso Outotec i.e., Metso Outotec and Caterpillar go up and down completely randomly.
Pair Corralation between Metso Outotec and Caterpillar
Assuming the 90 days horizon Metso Outotec Oyj is expected to under-perform the Caterpillar. But the stock apears to be less risky and, when comparing its historical volatility, Metso Outotec Oyj is 1.41 times less risky than Caterpillar. The stock trades about -0.11 of its potential returns per unit of risk. The Caterpillar is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 35,150 in Caterpillar on September 2, 2024 and sell it today you would earn a total of 3,600 from holding Caterpillar or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metso Outotec Oyj vs. Caterpillar
Performance |
| Timeline |
| Metso Outotec Oyj |
| Caterpillar |
Metso Outotec and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metso Outotec and Caterpillar
The main advantage of trading using opposite Metso Outotec and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metso Outotec 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.| Metso Outotec vs. SPORT LISBOA E | Metso Outotec vs. Columbia Sportswear | Metso Outotec vs. BII Railway Transportation | Metso Outotec vs. Sumitomo Mitsui Construction |
| Caterpillar vs. BROADSTNET LEADL 00025 | Caterpillar vs. Texas Roadhouse | Caterpillar vs. GALENA MINING LTD | Caterpillar vs. TITANIUM TRANSPORTGROUP |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |