Correlation Between Caterpillar and 459506AS0
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By analyzing existing cross correlation between Caterpillar and IFF 3468 01 DEC 50, you can compare the effects of market volatilities on Caterpillar and 459506AS0 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 459506AS0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 459506AS0.
Diversification Opportunities for Caterpillar and 459506AS0
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and 459506AS0 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and IFF 3468 01 DEC 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IFF 3468 01 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 459506AS0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IFF 3468 01 has no effect on the direction of Caterpillar i.e., Caterpillar and 459506AS0 go up and down completely randomly.
Pair Corralation between Caterpillar and 459506AS0
Considering the 90-day investment horizon Caterpillar is expected to generate 2.22 times more return on investment than 459506AS0. However, Caterpillar is 2.22 times more volatile than IFF 3468 01 DEC 50. It trades about 0.09 of its potential returns per unit of risk. IFF 3468 01 DEC 50 is currently generating about -0.15 per unit of risk. If you would invest 34,671 in Caterpillar on September 15, 2024 and sell it today you would earn a total of 3,380 from holding Caterpillar or generate 9.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Caterpillar vs. IFF 3468 01 DEC 50
Performance |
Timeline |
Caterpillar |
IFF 3468 01 |
Caterpillar and 459506AS0 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caterpillar and 459506AS0
The main advantage of trading using opposite Caterpillar and 459506AS0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 459506AS0 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 459506AS0 will offset losses from the drop in 459506AS0's long position.Caterpillar vs. Aquagold International | Caterpillar vs. Thrivent High Yield | Caterpillar vs. Morningstar Unconstrained Allocation | Caterpillar vs. Via Renewables |
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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 Stocks Directory module to find actively traded stocks across global markets.
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