Correlation Between V2X and Moog

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

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

Diversification Opportunities for V2X and Moog

0.39

Correlation Coefficient

V2X  Moog

Weak diversification

The 3 months correlation between V2X and Moog is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding V2X Inc and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and V2X 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 V2X Inc 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 V2X i.e., V2X and Moog go up and down completely randomly.

Pair Corralation between V2X and Moog

Considering the 90-day investment horizon V2X Inc is expected to generate 1.28 times more return on investment than Moog. However, V2X is 1.28 times more volatile than Moog Inc. It trades about 0.06 of its potential returns per unit of risk. Moog Inc is currently generating about -0.06 per unit of risk. 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

V2X Inc  vs.  Moog Inc

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.

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.

Pair Trading with V2X and Moog

The main advantage of trading using opposite V2X and Moog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if V2X 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 V2X Inc 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.