This module allows you to analyze existing cross correlation between Deere Company and Caterpillar Inc. You can compare the effects of market volatilities on Deere and Caterpillar 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 Deere with a short position of Caterpillar. See also your portfolio center
. Please also check ongoing floating volatility patterns of Deere
Deere Company vs Caterpillar Inc
Allowing for the 30-days total investment horizon, Deere Company is expected to generate 1.12 times more return on investment than Caterpillar. However, Deere is 1.12 times more volatile than Caterpillar Inc. It trades about 0.59 of its potential returns per unit of risk. Caterpillar Inc is currently generating about 0.26 per unit of risk. If you would invest 13,223 in Deere Company on November 10, 2017 and sell it today you would earn a total of 1,935 from holding Deere Company or generate 14.63% return on investment over 30 days.
|Time Period||1 Month [change]|
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding Deere Company and Caterpillar Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar Inc and Deere 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 Deere Company are associated (or correlated) with Caterpillar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caterpillar Inc has no effect on the direction of Deere i.e. Deere and Caterpillar go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in Deere Company are ranked lower than 38 (%) of all global equities and portfolios over the last 30 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Caterpillar Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 30 days.