Correlation Between Amtech Systems and Caterpillar
Can any of the company-specific risk be diversified away by investing in both Amtech Systems 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 Amtech Systems and Caterpillar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amtech Systems and Caterpillar, you can compare the effects of market volatilities on Amtech Systems 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 Amtech Systems with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amtech Systems and Caterpillar.
Diversification Opportunities for Amtech Systems and Caterpillar
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amtech and Caterpillar is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Amtech Systems and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and Amtech Systems 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 Amtech Systems 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 Amtech Systems i.e., Amtech Systems and Caterpillar go up and down completely randomly.
Pair Corralation between Amtech Systems and Caterpillar
Given the investment horizon of 90 days Amtech Systems is expected to generate 4.04 times more return on investment than Caterpillar. However, Amtech Systems is 4.04 times more volatile than Caterpillar. It trades about 0.15 of its potential returns per unit of risk. Caterpillar is currently generating about 0.19 per unit of risk. If you would invest 474.00 in Amtech Systems on July 26, 2025 and sell it today you would earn a total of 307.00 from holding Amtech Systems or generate 64.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Amtech Systems vs. Caterpillar
Performance |
| Timeline |
| Amtech Systems |
| Caterpillar |
Amtech Systems and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amtech Systems and Caterpillar
The main advantage of trading using opposite Amtech Systems and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amtech Systems 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.| Amtech Systems vs. MagnaChip Semiconductor | Amtech Systems vs. QuickLogic | Amtech Systems vs. Playstudios | Amtech Systems vs. SAIHEAT Limited |
| Caterpillar vs. Deere Company | Caterpillar vs. Raytheon Technologies Corp | Caterpillar vs. Eaton PLC | Caterpillar vs. GE Aerospace |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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