Correlation Between CAE and Boeing

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Can any of the company-specific risk be diversified away by investing in both CAE and Boeing 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 Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAE Inc and Boeing Company, you can compare the effects of market volatilities on CAE and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAE and Boeing.

Diversification Opportunities for CAE and Boeing

  Correlation Coefficient

Significant diversification

The 3 months correlation between CAE and Boeing is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CAE Inc and Boeing Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing Company 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 Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing Company has no effect on the direction of CAE i.e., CAE and Boeing go up and down completely randomly.

Pair Corralation between CAE and Boeing

Considering the 90-day investment horizon CAE Inc is expected to under-perform the Boeing. In addition to that, CAE is 1.04 times more volatile than Boeing Company. It trades about -0.07 of its total potential returns per unit of risk. Boeing Company is currently generating about -0.06 per unit of volatility. If you would invest  22,379  in Boeing Company on June 29, 2022 and sell it today you would lose (9,501)  from holding Boeing Company or give up 42.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

CAE Inc  vs.  Boeing Company

 Performance (%) 
CAE Inc 
CAE Performance
0 of 100
Over the last 90 days CAE Inc 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 rather sound which may send shares a bit higher in October 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CAE Price Channel

Boeing Company 
Boeing Performance
0 of 100
Over the last 90 days Boeing Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Boeing Price Channel

CAE and Boeing Volatility Contrast

   Predicted Return Density   

Pair Trading with CAE and Boeing

The main advantage of trading using opposite CAE and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAE position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.
CAE vs. Kibush Capital Corp
The idea behind CAE Inc and Boeing Company 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.
Boeing vs. Kibush Capital 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 Shere Portfolio module to track or share privately all of your investments from the convenience of any device.

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