Correlation Between BAE Systems and Moog
Can any of the company-specific risk be diversified away by investing in both BAE Systems 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 BAE Systems and Moog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAE Systems PLC and Moog Inc, you can compare the effects of market volatilities on BAE Systems 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 BAE Systems with a short position of Moog. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAE Systems and Moog.
Diversification Opportunities for BAE Systems and Moog
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BAE and Moog is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding BAE Systems PLC and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and BAE Systems 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 BAE Systems PLC 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 BAE Systems i.e., BAE Systems and Moog go up and down completely randomly.
Pair Corralation between BAE Systems and Moog
Assuming the 90 days horizon BAE Systems PLC is expected to generate 1.05 times more return on investment than Moog. However, BAE Systems is 1.05 times more volatile than Moog Inc. It trades about 0.24 of its potential returns per unit of risk. Moog Inc is currently generating about -0.13 per unit of risk. If you would invest 1,423 in BAE Systems PLC on December 2, 2024 and sell it today you would earn a total of 430.00 from holding BAE Systems PLC or generate 30.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BAE Systems PLC vs. Moog Inc
Performance |
Timeline |
BAE Systems PLC |
Moog Inc |
BAE Systems and Moog Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BAE Systems and Moog
The main advantage of trading using opposite BAE Systems and Moog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAE Systems 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.BAE Systems vs. Huntington Ingalls Industries | BAE Systems vs. Rheinmetall AG ADR | BAE Systems vs. Airbus Group NV | BAE Systems vs. General Dynamics |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
CEOs Directory Screen CEOs from public companies around the world | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |