Correlation Between AAR Corp and Moog
Can any of the company-specific risk be diversified away by investing in both AAR Corp 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 AAR Corp and Moog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAR Corp and Moog Inc, you can compare the effects of market volatilities on AAR Corp 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 AAR Corp with a short position of Moog. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAR Corp and Moog.
Diversification Opportunities for AAR Corp and Moog
Very weak diversification
The 3 months correlation between AAR and Moog is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding AAR Corp and Moog Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moog Inc and AAR Corp 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 AAR Corp 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 AAR Corp i.e., AAR Corp and Moog go up and down completely randomly.
Pair Corralation between AAR Corp and Moog
Considering the 90-day investment horizon AAR Corp is expected to generate 1.24 times more return on investment than Moog. However, AAR Corp is 1.24 times more volatile than Moog Inc. It trades about 0.0 of its potential returns per unit of risk. Moog Inc is currently generating about -0.01 per unit of risk. If you would invest 6,997 in AAR Corp on March 22, 2025 and sell it today you would lose (245.00) from holding AAR Corp or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAR Corp vs. Moog Inc
Performance |
| Timeline |
| AAR Corp |
| Moog Inc |
AAR Corp and Moog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAR Corp and Moog
The main advantage of trading using opposite AAR Corp and Moog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAR Corp 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.| AAR Corp vs. Curtiss Wright | AAR Corp vs. Hexcel | AAR Corp vs. Moog Inc | AAR Corp vs. Ducommun Incorporated |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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