Correlation Between Caterpillar and Wasatch International
Can any of the company-specific risk be diversified away by investing in both Caterpillar and Wasatch International 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 Wasatch International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caterpillar and Wasatch International Growth, you can compare the effects of market volatilities on Caterpillar and Wasatch International 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 Wasatch International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and Wasatch International.
Diversification Opportunities for Caterpillar and Wasatch International
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caterpillar and Wasatch is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and Wasatch International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch International 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 Wasatch International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch International has no effect on the direction of Caterpillar i.e., Caterpillar and Wasatch International go up and down completely randomly.
Pair Corralation between Caterpillar and Wasatch International
Considering the 90-day investment horizon Caterpillar is expected to generate 1.83 times more return on investment than Wasatch International. However, Caterpillar is 1.83 times more volatile than Wasatch International Growth. It trades about 0.27 of its potential returns per unit of risk. Wasatch International Growth is currently generating about 0.05 per unit of risk. If you would invest 34,821 in Caterpillar on May 28, 2025 and sell it today you would earn a total of 8,409 from holding Caterpillar or generate 24.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Caterpillar vs. Wasatch International Growth
Performance |
| Timeline |
| Caterpillar |
| Wasatch International |
Caterpillar and Wasatch International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and Wasatch International
The main advantage of trading using opposite Caterpillar and Wasatch International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, Wasatch International 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 Wasatch International will offset losses from the drop in Wasatch International's long position.| Caterpillar vs. Deere Company | Caterpillar vs. GreenPower Motor | Caterpillar vs. Hyster Yale Materials Handling | Caterpillar vs. Alamo Group |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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