Correlation Between Innovative Solutions and Moog

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

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

Diversification Opportunities for Innovative Solutions and Moog

0.56

Correlation Coefficient

Innovative Solutions  Moog

Very weak diversification

The 3 months correlation between Innovative and Moog is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Solutions and and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and Innovative Solutions 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 Innovative Solutions and 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 Innovative Solutions i.e., Innovative Solutions and Moog go up and down completely randomly.

Pair Corralation between Innovative Solutions and Moog

Given the investment horizon of 90 days Innovative Solutions and is expected to generate 0.76 times more return on investment than Moog. However, Innovative Solutions and is 1.31 times less risky than Moog. It trades about 0.2 of its potential returns per unit of risk. Moog Inc is currently generating about -0.01 per unit of risk. If you would invest  648.00  in Innovative Solutions and on September 19, 2024 and sell it today you would earn a total of  138.00  from holding Innovative Solutions and or generate 21.3% return on investment over 90 days.

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

Innovative Solutions and  vs.  Moog Inc

Innovative Solutions and

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Solutions and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Innovative Solutions exhibited solid returns over the last few months and may actually be approaching a breakup point.

Moog Inc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Moog Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Moog is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Innovative Solutions and Moog

The main advantage of trading using opposite Innovative Solutions and Moog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Solutions 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 Innovative Solutions and 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..