Correlation Between Caterpillar and Premier Hldg
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Premier Hldg 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 Premier Hldg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Premier Hldg Corp, you can compare the effects of market volatilities on Caterpillar and Premier Hldg 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 Premier Hldg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Premier Hldg.
Diversification Opportunities for Caterpillar and Premier Hldg
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Premier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Premier Hldg Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Hldg 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 Premier Hldg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Hldg Corp has no effect on the direction of Caterpillar i.e., Caterpillar and Premier Hldg go up and down completely randomly.
Pair Corralation between Caterpillar and Premier Hldg
If you would invest 35,390 in Caterpillar on January 19, 2024 and sell it today you would earn a total of 403.00 from holding Caterpillar or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Caterpillar vs. Premier Hldg Corp
Performance |
| Timeline |
| Caterpillar |
| Premier Hldg Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Caterpillar and Premier Hldg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Premier Hldg
The main advantage of trading using opposite Caterpillar and Premier Hldg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Premier Hldg 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 Premier Hldg will offset losses from the drop in Premier Hldg's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. CNH Industrial NV | Caterpillar vs. NikolaCorp | Caterpillar vs. PACCAR Inc |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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