Correlation Between Caterpillar and CCFNB Bancorp

Can any of the company-specific risk be diversified away by investing in both Caterpillar and CCFNB Bancorp 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 CCFNB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Caterpillar and CCFNB Bancorp, you can compare the effects of market volatilities on Caterpillar and CCFNB Bancorp 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 CCFNB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and CCFNB Bancorp.

Diversification Opportunities for Caterpillar and CCFNB Bancorp

0.55

Correlation Coefficient

Caterpillar  CCFNB Bancorp

Very weak diversification

The 3 months correlation between Caterpillar and CCFNB is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and CCFNB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCFNB Bancorp 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 CCFNB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCFNB Bancorp has no effect on the direction of Caterpillar i.e., Caterpillar and CCFNB Bancorp go up and down completely randomly.

Pair Corralation between Caterpillar and CCFNB Bancorp

Considering the 90-day investment horizon Caterpillar is expected to generate 1.18 times more return on investment than CCFNB Bancorp. However, Caterpillar is 1.18 times more volatile than CCFNB Bancorp. It trades about 0.24 of its potential returns per unit of risk. CCFNB Bancorp is currently generating about 0.11 per unit of risk. If you would invest  40,444  in Caterpillar on July 11, 2025 and sell it today you would earn a total of  9,768  from holding Caterpillar or generate 24.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Caterpillar  vs.  CCFNB Bancorp

Caterpillar

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caterpillar are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Caterpillar unveiled solid returns over the last few months and may actually be approaching a breakup point.

CCFNB Bancorp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CCFNB Bancorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, CCFNB Bancorp may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Caterpillar and CCFNB Bancorp

The main advantage of trading using opposite Caterpillar and CCFNB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, CCFNB Bancorp 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 CCFNB Bancorp will offset losses from the drop in CCFNB Bancorp's long position.

The idea behind Caterpillar and CCFNB Bancorp 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.