Correlation Between Caterpillar and HITACHI STRMACHADR2
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By analyzing existing cross correlation between Caterpillar and HITACHI STRMACHADR2, you can compare the effects of market volatilities on Caterpillar and HITACHI STRMACHADR2 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 HITACHI STRMACHADR2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and HITACHI STRMACHADR2.
Diversification Opportunities for Caterpillar and HITACHI STRMACHADR2
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Caterpillar and HITACHI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and HITACHI STRMACHADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HITACHI STRMACHADR2 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 HITACHI STRMACHADR2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HITACHI STRMACHADR2 has no effect on the direction of Caterpillar i.e., Caterpillar and HITACHI STRMACHADR2 go up and down completely randomly.
Pair Corralation between Caterpillar and HITACHI STRMACHADR2
Assuming the 90 days trading horizon Caterpillar is expected to generate 1.21 times more return on investment than HITACHI STRMACHADR2. However, Caterpillar is 1.21 times more volatile than HITACHI STRMACHADR2. It trades about 0.05 of its potential returns per unit of risk. HITACHI STRMACHADR2 is currently generating about -0.03 per unit of risk. If you would invest 33,170 in Caterpillar on September 23, 2024 and sell it today you would earn a total of 1,580 from holding Caterpillar or generate 4.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Caterpillar vs. HITACHI STRMACHADR2
Performance |
Timeline |
Caterpillar |
HITACHI STRMACHADR2 |
Caterpillar and HITACHI STRMACHADR2 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caterpillar and HITACHI STRMACHADR2
The main advantage of trading using opposite Caterpillar and HITACHI STRMACHADR2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 will offset losses from the drop in HITACHI STRMACHADR2's long position.Caterpillar vs. Caterpillar | Caterpillar vs. Deere Company | Caterpillar vs. AB Volvo | Caterpillar vs. VOLVO B UNSPADR |
HITACHI STRMACHADR2 vs. Caterpillar | HITACHI STRMACHADR2 vs. Caterpillar | HITACHI STRMACHADR2 vs. Deere Company | HITACHI STRMACHADR2 vs. AB Volvo |
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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