Correlation Between Caterpillar and Titan Logix

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

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

Diversification Opportunities for Caterpillar and Titan Logix

0.0

Correlation Coefficient

Caterpillar  Titan Logix

Pay attention - limited upside

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

Pair Corralation between Caterpillar and Titan Logix

If you would invest  34,407  in Caterpillar on September 13, 2024 and sell it today you would earn a total of  4,432  from holding Caterpillar or generate 12.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Caterpillar  vs.  Titan Logix Corp

Caterpillar

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caterpillar are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Caterpillar unveiled solid returns over the last few months and may actually be approaching a breakup point.

Titan Logix Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titan Logix Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Titan Logix is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Caterpillar and Titan Logix

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

The idea behind Caterpillar and Titan Logix Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.