Correlation Between Caterpillar and Jianpu Technology
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Jianpu Technology 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 Jianpu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Jianpu Technology, you can compare the effects of market volatilities on Caterpillar and Jianpu Technology 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 Jianpu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Jianpu Technology.
Diversification Opportunities for Caterpillar and Jianpu Technology
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Jianpu is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Jianpu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jianpu Technology 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 Jianpu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jianpu Technology has no effect on the direction of Caterpillar i.e., Caterpillar and Jianpu Technology go up and down completely randomly.
Pair Corralation between Caterpillar and Jianpu Technology
If you would invest 78.00 in Jianpu Technology on February 1, 2024 and sell it today you would earn a total of 0.00 from holding Jianpu Technology or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 4.55% |
Values | Daily Returns |
Caterpillar vs. Jianpu Technology
Performance |
Timeline |
Caterpillar |
Jianpu Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Caterpillar and Jianpu Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caterpillar and Jianpu Technology
The main advantage of trading using opposite Caterpillar and Jianpu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Jianpu Technology 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 Jianpu Technology will offset losses from the drop in Jianpu Technology's long position.Caterpillar vs. AGCO Corporation | Caterpillar vs. CNH Industrial NV | Caterpillar vs. Deere Company | Caterpillar vs. Lindsay |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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