Correlation Between Caterpillar and Jpmorgan Trust

Can any of the company-specific risk be diversified away by investing in both Caterpillar and Jpmorgan Trust 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 Caterpillar and Jpmorgan Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Caterpillar and Jpmorgan Trust I, you can compare the effects of market volatilities on Caterpillar and Jpmorgan Trust 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 Jpmorgan Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Jpmorgan Trust.

Diversification Opportunities for Caterpillar and Jpmorgan Trust

0.0

Correlation Coefficient

Caterpillar  Jpmorgan Trust

Pay attention - limited upside

The 3 months correlation between Caterpillar and Jpmorgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Jpmorgan Trust I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Trust I 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 are associated (or correlated) with Jpmorgan Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Trust I has no effect on the direction of Caterpillar i.e., Caterpillar and Jpmorgan Trust go up and down completely randomly.

Pair Corralation between Caterpillar and Jpmorgan Trust

If you would invest  100.00  in Jpmorgan Trust I on November 29, 2024 and sell it today you would earn a total of  0.00  from holding Jpmorgan Trust I or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Caterpillar  vs.  Jpmorgan Trust I

Caterpillar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Caterpillar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jpmorgan Trust I

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jpmorgan Trust I has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Caterpillar and Jpmorgan Trust

The main advantage of trading using opposite Caterpillar and Jpmorgan Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Jpmorgan Trust 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 Jpmorgan Trust will offset losses from the drop in Jpmorgan Trust's long position.

The idea behind Caterpillar and Jpmorgan Trust I pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.