Correlation Between Moog and Thales SA
Can any of the company-specific risk be diversified away by investing in both Moog and Thales SA 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 Thales SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moog Inc and Thales SA, you can compare the effects of market volatilities on Moog and Thales SA 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 Thales SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moog and Thales SA.
Diversification Opportunities for Moog and Thales SA
Very good diversification
The 3 months correlation between Moog and Thales is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Moog Inc and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA 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 Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Moog i.e., Moog and Thales SA go up and down completely randomly.
Pair Corralation between Moog and Thales SA
Assuming the 90 days horizon Moog Inc is expected to generate 1.97 times more return on investment than Thales SA. However, Moog is 1.97 times more volatile than Thales SA. It trades about 0.25 of its potential returns per unit of risk. Thales SA is currently generating about -0.38 per unit of risk. If you would invest 19,102 in Moog Inc on August 31, 2024 and sell it today you would earn a total of 2,365 from holding Moog Inc or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Moog Inc vs. Thales SA
Performance |
| Timeline |
| Moog Inc |
| Thales SA |
Moog and Thales SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moog and Thales SA
The main advantage of trading using opposite Moog and Thales SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moog position performs unexpectedly, Thales SA 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 Thales SA will offset losses from the drop in Thales SA's long position.The idea behind Moog Inc and Thales SA 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.| Thales SA vs. Firan Technology Group | Thales SA vs. 808 Renewable Energy | Thales SA vs. Park Electrochemical | Thales SA vs. Innovative Solutions and |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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