Correlation Between CAE and Intuitive Machines

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

By analyzing existing cross correlation between CAE Inc and Intuitive Machines, you can compare the effects of market volatilities on CAE and Intuitive Machines 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 CAE with a short position of Intuitive Machines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAE and Intuitive Machines.

Diversification Opportunities for CAE and Intuitive Machines

0.06

Correlation Coefficient

CAE  Intuitive Machines

Significant diversification

The 3 months correlation between CAE and Intuitive is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CAE Inc and Intuitive Machines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Machines and CAE 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 CAE Inc are associated (or correlated) with Intuitive Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Machines has no effect on the direction of CAE i.e., CAE and Intuitive Machines go up and down completely randomly.

Pair Corralation between CAE and Intuitive Machines

Considering the 90-day investment horizon CAE Inc is expected to generate 0.12 times more return on investment than Intuitive Machines. However, CAE Inc is 8.63 times less risky than Intuitive Machines. It trades about 0.01 of its potential returns per unit of risk. Intuitive Machines is currently generating about -0.15 per unit of risk. If you would invest  2,532  in CAE Inc on December 29, 2024 and sell it today you would lose (1.00) from holding CAE Inc or give up 0.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.41%
Values	Daily Returns

CAE Inc  vs.  Intuitive Machines

CAE Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAE Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CAE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Intuitive Machines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intuitive Machines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with CAE and Intuitive Machines

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

The idea behind CAE Inc and Intuitive Machines 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.