Correlation Between CAE and StandardAero,

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

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

Diversification Opportunities for CAE and StandardAero,

0.13

Correlation Coefficient

CAE  StandardAero,

Average diversification

The 3 months correlation between CAE and StandardAero, is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding CAE Inc and StandardAero, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StandardAero, 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 StandardAero,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StandardAero, has no effect on the direction of CAE i.e., CAE and StandardAero, go up and down completely randomly.

Pair Corralation between CAE and StandardAero,

Considering the 90-day investment horizon CAE is expected to generate 9.58 times less return on investment than StandardAero,. In addition to that, CAE is 1.05 times more volatile than StandardAero,. It trades about 0.01 of its total potential returns per unit of risk. StandardAero, is currently generating about 0.11 per unit of volatility. If you would invest  2,540  in StandardAero, on December 21, 2024 and sell it today you would earn a total of  369.00  from holding StandardAero, or generate 14.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

CAE Inc  vs.  StandardAero,

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.

StandardAero,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in StandardAero, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, StandardAero, displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CAE and StandardAero,

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

The idea behind CAE Inc and StandardAero, 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.