Correlation Between VSE and Moog
Can any of the company-specific risk be diversified away by investing in both VSE 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 VSE and Moog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VSE Corporation and Moog Inc, you can compare the effects of market volatilities on VSE 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 VSE with a short position of Moog. Check out your portfolio center. Please also check ongoing floating volatility patterns of VSE and Moog.
Diversification Opportunities for VSE and Moog
Poor diversification
The 3 months correlation between VSE and Moog is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VSE Corp. and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and VSE 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 VSE Corporation 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 VSE i.e., VSE and Moog go up and down completely randomly.
Pair Corralation between VSE and Moog
Given the investment horizon of 90 days VSE Corporation is expected to generate 1.25 times more return on investment than Moog. However, VSE is 1.25 times more volatile than Moog Inc. It trades about 0.12 of its potential returns per unit of risk. Moog Inc is currently generating about 0.11 per unit of risk. If you would invest 6,013 in VSE Corporation on August 26, 2024 and sell it today you would earn a total of 5,685 from holding VSE Corporation or generate 94.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VSE Corp. vs. Moog Inc
Performance |
| Timeline |
| VSE Corporation |
| Moog Inc |
VSE and Moog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VSE and Moog
The main advantage of trading using opposite VSE and Moog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VSE 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.| VSE vs. Park Electrochemical | VSE vs. Innovative Solutions and | VSE vs. Curtiss Wright | VSE vs. National Presto Industries |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |