Correlation Between 58 and Caterpillar
Can any of the company-specific risk be diversified away by investing in both 58 and Caterpillar 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 58 and Caterpillar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 58 Inc and Caterpillar, you can compare the effects of market volatilities on 58 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 58 with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of 58 and Caterpillar.
Diversification Opportunities for 58 and Caterpillar
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 58 and Caterpillar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 58 Inc and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and 58 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 58 Inc 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 has no effect on the direction of 58 i.e., 58 and Caterpillar go up and down completely randomly.
Pair Corralation between 58 and Caterpillar
If you would invest 35,510 in Caterpillar on January 26, 2024 and sell it today you would earn a total of 842.00 from holding Caterpillar or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
58 Inc vs. Caterpillar
Performance |
| Timeline |
| 58 Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Caterpillar |
58 and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 58 and Caterpillar
The main advantage of trading using opposite 58 and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 58 position performs unexpectedly, Caterpillar 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 Caterpillar will offset losses from the drop in Caterpillar's long position.The idea behind 58 Inc and Caterpillar pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Caterpillar vs. NikolaCorp | Caterpillar vs. Ideanomics | Caterpillar vs. Lion Electric Corp | Caterpillar vs. Wabash National |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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