Correlation Between Columbus McKinnon and Moog
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon 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 Columbus McKinnon and Moog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and Moog Inc, you can compare the effects of market volatilities on Columbus McKinnon 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 Columbus McKinnon with a short position of Moog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and Moog.
Diversification Opportunities for Columbus McKinnon and Moog
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbus and Moog is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and Columbus McKinnon 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 Columbus McKinnon 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 Columbus McKinnon i.e., Columbus McKinnon and Moog go up and down completely randomly.
Pair Corralation between Columbus McKinnon and Moog
Given the investment horizon of 90 days Columbus McKinnon is expected to generate 0.89 times more return on investment than Moog. However, Columbus McKinnon is 1.12 times less risky than Moog. It trades about 0.38 of its potential returns per unit of risk. Moog Inc is currently generating about 0.26 per unit of risk. If you would invest 3,175 in Columbus McKinnon on September 1, 2024 and sell it today you would earn a total of 754.00 from holding Columbus McKinnon or generate 23.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbus McKinnon vs. Moog Inc
Performance |
| Timeline |
| Columbus McKinnon |
| Moog Inc |
Columbus McKinnon and Moog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and Moog
The main advantage of trading using opposite Columbus McKinnon and Moog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon 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.| Columbus McKinnon vs. Nikola Corp | Columbus McKinnon vs. Wabash National | Columbus McKinnon vs. Titan International | Columbus McKinnon vs. Deere Company |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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