Correlation Between Caterpillar and Colabor
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Colabor 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 Colabor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Colabor Group, you can compare the effects of market volatilities on Caterpillar and Colabor 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 Colabor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Colabor.
Diversification Opportunities for Caterpillar and Colabor
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caterpillar and Colabor is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Colabor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colabor Group 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 Colabor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colabor Group has no effect on the direction of Caterpillar i.e., Caterpillar and Colabor go up and down completely randomly.
Pair Corralation between Caterpillar and Colabor
Considering the 90-day investment horizon Caterpillar is expected to generate 0.23 times more return on investment than Colabor. However, Caterpillar is 4.34 times less risky than Colabor. It trades about 0.25 of its potential returns per unit of risk. Colabor Group is currently generating about -0.23 per unit of risk. If you would invest 41,007 in Caterpillar on July 21, 2025 and sell it today you would earn a total of 11,701 from holding Caterpillar or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caterpillar vs. Colabor Group
Performance |
| Timeline |
| Caterpillar |
| Colabor Group |
Caterpillar and Colabor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Colabor
The main advantage of trading using opposite Caterpillar and Colabor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Colabor 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 Colabor will offset losses from the drop in Colabor's long position.| Caterpillar vs. Digi Power X | Caterpillar vs. Japan Airlines Ltd | Caterpillar vs. Amtech Systems | Caterpillar vs. Courtside Group, Common |
| Colabor vs. Innovative Food Hldg | Colabor vs. Organto Foods | Colabor vs. Pontus Protein | Colabor vs. Reeds Inc |
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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