Correlation Between MicroStrategy Incorporated and Moog

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

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

Diversification Opportunities for MicroStrategy Incorporated and Moog

0.76

Correlation Coefficient

MicroStrategy Incorporated  Moog

Poor diversification

The 3 months correlation between MicroStrategy and Moog is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding MicroStrategy Incorporated and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and MicroStrategy Incorporated 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 MicroStrategy Incorporated 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 MicroStrategy Incorporated i.e., MicroStrategy Incorporated and Moog go up and down completely randomly.

Pair Corralation between MicroStrategy Incorporated and Moog

Given the investment horizon of 90 days MicroStrategy Incorporated is expected to generate 2.42 times more return on investment than Moog. However, MicroStrategy Incorporated is 2.42 times more volatile than Moog Inc. It trades about 0.02 of its potential returns per unit of risk. Moog Inc is currently generating about -0.05 per unit of risk. If you would invest  30,296  in MicroStrategy Incorporated on December 30, 2024 and sell it today you would lose (1,355) from holding MicroStrategy Incorporated or give up 4.47% of portfolio value over 90 days.

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

MicroStrategy Incorporated  vs.  Moog Inc

MicroStrategy Incorporated

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MicroStrategy Incorporated are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, MicroStrategy Incorporated may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 abnormal performance, the Preferred 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.

Pair Trading with MicroStrategy Incorporated and Moog

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

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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 CEOs Directory module to screen CEOs from public companies around the world.