Correlation Between NVIDIA and Moog

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

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

Diversification Opportunities for NVIDIA and Moog

0.61

Correlation Coefficient

NVIDIA  Moog

Poor diversification

The 3 months correlation between NVIDIA and Moog is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and Moog go up and down completely randomly.

Pair Corralation between NVIDIA and Moog

Given the investment horizon of 90 days NVIDIA is expected to generate 1.4 times more return on investment than Moog. However, NVIDIA is 1.4 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 -0.12 per unit of risk. If you would invest  12,465  in NVIDIA on December 1, 2024 and sell it today you would earn a total of  27.00  from holding NVIDIA or generate 0.22% return on investment over 90 days.

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

NVIDIA  vs.  Moog Inc

NVIDIA

Risk-Adjusted Performance

Very Weak

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

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 abnormal performance in the last few months, the Preferred Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with NVIDIA and Moog

The main advantage of trading using opposite NVIDIA and Moog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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 NVIDIA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.