Correlation Between CATERPILLAR and Travelers Companies
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By analyzing existing cross correlation between CATERPILLAR INC 53 and The Travelers Companies, you can compare the effects of market volatilities on CATERPILLAR and Travelers Companies 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 Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATERPILLAR and Travelers Companies.
Diversification Opportunities for CATERPILLAR and Travelers Companies
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CATERPILLAR and Travelers is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding CATERPILLAR INC 53 and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies 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 Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of CATERPILLAR i.e., CATERPILLAR and Travelers Companies go up and down completely randomly.
Pair Corralation between CATERPILLAR and Travelers Companies
Assuming the 90 days trading horizon CATERPILLAR INC 53 is expected to generate 0.6 times more return on investment than Travelers Companies. However, CATERPILLAR INC 53 is 1.66 times less risky than Travelers Companies. It trades about 0.06 of its potential returns per unit of risk. The Travelers Companies is currently generating about -0.15 per unit of risk. If you would invest 10,345 in CATERPILLAR INC 53 on September 12, 2024 and sell it today you would earn a total of 87.00 from holding CATERPILLAR INC 53 or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
CATERPILLAR INC 53 vs. The Travelers Companies
Performance |
| Timeline |
| CATERPILLAR INC 53 |
| The Travelers Companies |
CATERPILLAR and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATERPILLAR and Travelers Companies
The main advantage of trading using opposite CATERPILLAR and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATERPILLAR position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.| CATERPILLAR vs. AEP TEX INC | CATERPILLAR vs. US BANK NATIONAL | CATERPILLAR vs. Applied Blockchain | CATERPILLAR vs. BigBearai Holdings |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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