Correlation Between Air Industries and Moog

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

By analyzing existing cross correlation between Air Industries Group and Moog Inc, you can compare the effects of market volatilities on Air Industries and Moog 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 Air Industries with a short position of Moog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Industries and Moog.

Diversification Opportunities for Air Industries and Moog

0.78

Correlation Coefficient

Air Industries  Moog

Poor diversification

The 3 months correlation between Air and Moog is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Air Industries Group and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and Air 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 Air Industries Group are associated (or correlated) with Moog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moog Inc has no effect on the direction of Air Industries i.e., Air Industries and Moog go up and down completely randomly.

Pair Corralation between Air Industries and Moog

Given the investment horizon of 90 days Air Industries Group is expected to under-perform the Moog. In addition to that, Air Industries is 1.33 times more volatile than Moog Inc. It trades about -0.08 of its total potential returns per unit of risk. Moog Inc is currently generating about -0.06 per unit of volatility. If you would invest  19,590  in Moog Inc on December 27, 2024 and sell it today you would lose (1,771) from holding Moog Inc or give up 9.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Air Industries Group  vs.  Moog Inc

Air Industries Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Industries Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Moog Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moog Inc 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.

Pair Trading with Air Industries and Moog

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

The idea behind Air Industries Group and Moog Inc 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.