Correlation Between Moog and Thales SA

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

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

Diversification Opportunities for Moog and Thales SA

-0.29

Correlation Coefficient

Moog  Thales SA

Very good diversification

The 3 months correlation between Moog and Thales is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Moog Inc and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA 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 Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Moog i.e., Moog and Thales SA go up and down completely randomly.

Pair Corralation between Moog and Thales SA

Assuming the 90 days horizon Moog Inc is expected to generate 1.05 times more return on investment than Thales SA. However, Moog is 1.05 times more volatile than Thales SA. It trades about 0.13 of its potential returns per unit of risk. Thales SA is currently generating about 0.03 per unit of risk. If you would invest  8,743  in Moog Inc on September 29, 2024 and sell it today you would earn a total of  10,244  from holding Moog Inc or generate 117.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.89%
Values	Daily Returns

Moog Inc  vs.  Thales SA

Moog Inc

Risk-Adjusted Performance

0 of 100

Very 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Thales SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thales SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Moog and Thales SA

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

The idea behind Moog Inc and Thales SA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.