This module allows you to analyze existing cross correlation between Caterpillar and China Yuchai International Limited. You can compare the effects of market volatilities on Caterpillar and China Yuchai 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 China Yuchai. See also your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and China Yuchai.
Caterpillar Inc vs. China Yuchai International Lim
Considering 30-days investment horizon, Caterpillar is expected to generate 0.83 times more return on investment than China Yuchai. However, Caterpillar is 1.21 times less risky than China Yuchai. It trades about -0.06 of its potential returns per unit of risk. China Yuchai International Limited is currently generating about -0.36 per unit of risk. If you would invest 14,313 in Caterpillar on June 20, 2018 and sell it today you would lose (371.00) from holding Caterpillar or give up 2.59% of portfolio value over 30 days.
Pair Corralation between Caterpillar and China Yuchai
Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar Inc and China Yuchai International Lim in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on China Yuchai Interna 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 China Yuchai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Yuchai Interna has no effect on the direction of Caterpillar i.e. Caterpillar and China Yuchai go up and down completely randomly.
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