Correlation Between Toromont Industries and CAE
Can any of the company-specific risk be diversified away by investing in both Toromont Industries 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 Toromont Industries and CAE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toromont Industries and CAE Inc, you can compare the effects of market volatilities on Toromont Industries 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 Toromont Industries with a short position of CAE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toromont Industries and CAE.
Diversification Opportunities for Toromont Industries and CAE
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Toromont and CAE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Toromont Industries and CAE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAE Inc and Toromont Industries 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 Toromont Industries 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 Toromont Industries i.e., Toromont Industries and CAE go up and down completely randomly.
Pair Corralation between Toromont Industries and CAE
Assuming the 90 days trading horizon Toromont Industries is expected to generate 1.04 times more return on investment than CAE. However, Toromont Industries is 1.04 times more volatile than CAE Inc. It trades about 0.15 of its potential returns per unit of risk. CAE Inc is currently generating about 0.01 per unit of risk. If you would invest 14,297 in Toromont Industries on August 13, 2025 and sell it today you would earn a total of 1,934 from holding Toromont Industries or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Toromont Industries vs. CAE Inc
Performance |
| Timeline |
| Toromont Industries |
| CAE Inc |
Toromont Industries and CAE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toromont Industries and CAE
The main advantage of trading using opposite Toromont Industries and CAE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toromont Industries 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.| Toromont Industries vs. CAE Inc | Toromont Industries vs. Finning International | Toromont Industries vs. Element Fleet Management | Toromont Industries vs. TFI International |
| CAE vs. Toromont Industries | CAE vs. Bombardier Pref B | CAE vs. Element Fleet Management | CAE vs. TFI International |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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