Correlation Between CATERPILLAR and Fevertree Drinks
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By analyzing existing cross correlation between CATERPILLAR INC 53 and Fevertree Drinks Plc, you can compare the effects of market volatilities on CATERPILLAR and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATERPILLAR and Fevertree Drinks.
Diversification Opportunities for CATERPILLAR and Fevertree Drinks
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CATERPILLAR and Fevertree is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CATERPILLAR INC 53 and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 INC 53 are associated (or correlated) with Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of CATERPILLAR i.e., CATERPILLAR and Fevertree Drinks go up and down completely randomly.
Pair Corralation between CATERPILLAR and Fevertree Drinks
Assuming the 90 days trading horizon CATERPILLAR INC 53 is expected to generate 0.61 times more return on investment than Fevertree Drinks. However, CATERPILLAR INC 53 is 1.65 times less risky than Fevertree Drinks. It trades about 0.12 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.02 per unit of risk. If you would invest 10,345 in CATERPILLAR INC 53 on September 13, 2024 and sell it today you would earn a total of 166.00 from holding CATERPILLAR INC 53 or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
CATERPILLAR INC 53 vs. Fevertree Drinks Plc
Performance |
| Timeline |
| CATERPILLAR INC 53 |
| Fevertree Drinks Plc |
CATERPILLAR and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATERPILLAR and Fevertree Drinks
The main advantage of trading using opposite CATERPILLAR and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATERPILLAR position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| CATERPILLAR vs. Fevertree Drinks Plc | CATERPILLAR vs. Diageo PLC ADR | CATERPILLAR vs. First Ship Lease | CATERPILLAR vs. SNDL Inc |
| Fevertree Drinks vs. National Beverage Corp | Fevertree Drinks vs. Celsius Holdings | Fevertree Drinks vs. Monster Beverage Corp | Fevertree Drinks vs. Coca Cola Femsa SAB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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