Correlation Between Moog and H M

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

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

Diversification Opportunities for Moog and H M

-0.51

Correlation Coefficient

Moog  H M

Excellent diversification

The 3 months correlation between Moog and HMRZF is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Moog Inc and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes and Moog 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 Moog Inc are associated (or correlated) with H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of Moog i.e., Moog and H M go up and down completely randomly.

Pair Corralation between Moog and H M

Assuming the 90 days horizon Moog Inc is expected to generate 0.89 times more return on investment than H M. However, Moog Inc is 1.13 times less risky than H M. It trades about 0.09 of its potential returns per unit of risk. H M Hennes is currently generating about -0.03 per unit of risk. If you would invest  19,715  in Moog Inc on August 30, 2024 and sell it today you would earn a total of  2,283  from holding Moog Inc or generate 11.58% return on investment over 90 days.

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

Moog Inc  vs.  H M Hennes

Moog Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moog Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Moog may actually be approaching a critical reversion point that can send shares even higher in December 2024.

H M Hennes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days H M Hennes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, H M is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Moog and H M

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

The idea behind Moog Inc and H M Hennes 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.