Correlation Between Ammo Preferred and Moog

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

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

Diversification Opportunities for Ammo Preferred and Moog

-0.37

Correlation Coefficient

Ammo Preferred  Moog

Very good diversification

The 3 months correlation between Ammo and Moog is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ammo Preferred and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and Ammo Preferred 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 Ammo Preferred 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 Ammo Preferred i.e., Ammo Preferred and Moog go up and down completely randomly.

Pair Corralation between Ammo Preferred and Moog

Assuming the 90 days horizon Ammo Preferred is expected to under-perform the Moog. In addition to that, Ammo Preferred is 1.94 times more volatile than Moog Inc. It trades about -0.04 of its total potential returns per unit of risk. Moog Inc is currently generating about 0.14 per unit of volatility. If you would invest  18,671  in Moog Inc on September 3, 2024 and sell it today you would earn a total of  3,517  from holding Moog Inc or generate 18.84% return on investment over 90 days.

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

Ammo Preferred  vs.  Moog Inc

Ammo Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ammo Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Preferred Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Moog Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moog Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Moog sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ammo Preferred and Moog

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

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..