Correlation Between Moog and Boeing
Can any of the company-specific risk be diversified away by investing in both Moog and Boeing 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 Boeing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moog Inc and The Boeing, you can compare the effects of market volatilities on Moog and Boeing 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 Boeing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moog and Boeing.
Diversification Opportunities for Moog and Boeing
Pay attention - limited upside
The 3 months correlation between Moog and Boeing is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Moog Inc and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing 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 Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Moog i.e., Moog and Boeing go up and down completely randomly.
Pair Corralation between Moog and Boeing
Assuming the 90 days horizon Moog Inc is expected to generate 1.03 times more return on investment than Boeing. However, Moog is 1.03 times more volatile than The Boeing. It trades about 0.05 of its potential returns per unit of risk. The Boeing is currently generating about -0.49 per unit of risk. If you would invest 15,666 in Moog Inc on January 26, 2024 and sell it today you would earn a total of 172.00 from holding Moog Inc or generate 1.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Moog Inc vs. The Boeing
Performance |
Timeline |
Moog Inc |
Boeing |
Moog and Boeing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Moog and Boeing
The main advantage of trading using opposite Moog and Boeing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moog position performs unexpectedly, Boeing 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 Boeing will offset losses from the drop in Boeing's long position.Moog vs. Vertical Aerospace | Moog vs. Rolls Royce Holdings plc | Moog vs. Embraer SA ADR | Moog vs. Rocket Lab USA |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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