Correlation Between Caterpillar and Cogeco
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Cogeco 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 Cogeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Cogeco Inc, you can compare the effects of market volatilities on Caterpillar and Cogeco 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 Cogeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Cogeco.
Diversification Opportunities for Caterpillar and Cogeco
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caterpillar and Cogeco is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Cogeco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Inc 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 Cogeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Inc has no effect on the direction of Caterpillar i.e., Caterpillar and Cogeco go up and down completely randomly.
Pair Corralation between Caterpillar and Cogeco
Considering the 90-day investment horizon Caterpillar is expected to generate 0.57 times more return on investment than Cogeco. However, Caterpillar is 1.77 times less risky than Cogeco. It trades about 0.08 of its potential returns per unit of risk. Cogeco Inc is currently generating about 0.0 per unit of risk. If you would invest 18,469 in Caterpillar on February 7, 2024 and sell it today you would earn a total of 15,741 from holding Caterpillar or generate 85.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 83.76% |
Values | Daily Returns |
Caterpillar vs. Cogeco Inc
Performance |
Timeline |
Caterpillar |
Cogeco Inc |
Caterpillar and Cogeco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caterpillar and Cogeco
The main advantage of trading using opposite Caterpillar and Cogeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Cogeco 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 Cogeco will offset losses from the drop in Cogeco's long position.Caterpillar vs. AGCO Corporation | Caterpillar vs. CNH Industrial NV | Caterpillar vs. Deere Company | Caterpillar vs. Lindsay |
Cogeco vs. 01 Communique Laboratory | Cogeco vs. LifeSpeak | Cogeco vs. RenoWorks Software | Cogeco vs. Morningstar Unconstrained Allocation |
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.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |