Correlation Between Momentus and CAE
Can any of the company-specific risk be diversified away by investing in both Momentus 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 Momentus and CAE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Momentus and CAE Inc, you can compare the effects of market volatilities on Momentus 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 Momentus with a short position of CAE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentus and CAE.
Diversification Opportunities for Momentus and CAE
Good diversification
The 3 months correlation between Momentus and CAE is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Momentus and CAE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAE Inc and Momentus 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 Momentus 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 Momentus i.e., Momentus and CAE go up and down completely randomly.
Pair Corralation between Momentus and CAE
Given the investment horizon of 90 days Momentus is expected to under-perform the CAE. In addition to that, Momentus is 7.52 times more volatile than CAE Inc. It trades about -0.01 of its total potential returns per unit of risk. CAE Inc is currently generating about 0.03 per unit of volatility. If you would invest 2,090 in CAE Inc on August 31, 2024 and sell it today you would earn a total of 257.00 from holding CAE Inc or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Momentus vs. CAE Inc
Performance |
| Timeline |
| Momentus |
| CAE Inc |
Momentus and CAE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Momentus and CAE
The main advantage of trading using opposite Momentus and CAE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentus 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.| Momentus vs. Planet Labs PBC | Momentus vs. Rocket Lab USA | Momentus vs. Redwire Corp | Momentus vs. Virgin Galactic Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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