Correlation Between Finning International and CAE
Can any of the company-specific risk be diversified away by investing in both Finning International and CAE 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 Finning International and CAE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finning International and CAE Inc, you can compare the effects of market volatilities on Finning International and CAE 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 Finning International with a short position of CAE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finning International and CAE.
Diversification Opportunities for Finning International and CAE
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finning and CAE is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Finning International and CAE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAE Inc and Finning International 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 Finning International are associated (or correlated) with CAE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAE Inc has no effect on the direction of Finning International i.e., Finning International and CAE go up and down completely randomly.
Pair Corralation between Finning International and CAE
Assuming the 90 days trading horizon Finning International is expected to generate 1.59 times more return on investment than CAE. However, Finning International is 1.59 times more volatile than CAE Inc. It trades about 0.17 of its potential returns per unit of risk. CAE Inc is currently generating about 0.02 per unit of risk. If you would invest 5,792 in Finning International on September 4, 2025 and sell it today you would earn a total of 1,522 from holding Finning International or generate 26.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finning International vs. CAE Inc
Performance |
| Timeline |
| Finning International |
| CAE Inc |
Finning International and CAE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finning International and CAE
The main advantage of trading using opposite Finning International and CAE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finning International position performs unexpectedly, CAE 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 CAE will offset losses from the drop in CAE's long position.| Finning International vs. Canaf Investments | Finning International vs. 2028 Investment Grade | Finning International vs. Big Rock Brewery | Finning International vs. Diversified Royalty Corp |
| CAE vs. Globex Mining Enterprises | CAE vs. AGF Management Limited | CAE vs. Postmedia Network Canada | CAE vs. Metalero Mining Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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