Correlation Between CAE and Cubic

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

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

Diversification Opportunities for CAE and Cubic

0.0

Correlation Coefficient

CAE  Cubic

Pay attention - limited upside

The 3 months correlation between CAE and Cubic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CAE Inc and Cubic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cubic 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 Cubic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cubic has no effect on the direction of CAE i.e., CAE and Cubic go up and down completely randomly.

Pair Corralation between CAE and Cubic

If you would invest (100.00) in Cubic on February 24, 2024 and sell it today you would earn a total of  100.00  from holding Cubic or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CAE Inc  vs.  Cubic

CAE Inc

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CAE Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Cubic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cubic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cubic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CAE and Cubic

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

The idea behind CAE Inc and Cubic 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.