Correlation Between Moog and V2X

Can any of the company-specific risk be diversified away by investing in both Moog and V2X 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 V2X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moog Inc and V2X Inc, you can compare the effects of market volatilities on Moog and V2X 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 V2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moog and V2X.

Diversification Opportunities for Moog and V2X

0.39

Correlation Coefficient

Moog  V2X

Weak diversification

The 3 months correlation between Moog and V2X is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Moog Inc and V2X Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V2X Inc 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 V2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V2X Inc has no effect on the direction of Moog i.e., Moog and V2X go up and down completely randomly.

Pair Corralation between Moog and V2X

Assuming the 90 days horizon Moog Inc is expected to under-perform the V2X. But the stock apears to be less risky and, when comparing its historical volatility, Moog Inc is 1.28 times less risky than V2X. The stock trades about -0.06 of its potential returns per unit of risk. The V2X Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,698  in V2X Inc on December 27, 2024 and sell it today you would earn a total of  386.00  from holding V2X Inc or generate 8.22% return on investment over 90 days.

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

Moog Inc  vs.  V2X Inc

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.

V2X Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in V2X Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, V2X may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Moog and V2X

The main advantage of trading using opposite Moog and V2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moog position performs unexpectedly, V2X 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 V2X will offset losses from the drop in V2X's long position.

The idea behind Moog Inc and V2X 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.