Correlation Between Moog and Lennar

Can any of the company-specific risk be diversified away by investing in both Moog and Lennar 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 Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moog Inc and Lennar, you can compare the effects of market volatilities on Moog and Lennar 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 Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moog and Lennar.

Diversification Opportunities for Moog and Lennar

0.08

Correlation Coefficient

Moog  Lennar

Significant diversification

The 3 months correlation between Moog and Lennar is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Moog Inc and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar 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 Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Moog i.e., Moog and Lennar go up and down completely randomly.

Pair Corralation between Moog and Lennar

Assuming the 90 days horizon Moog is expected to generate 1.36 times less return on investment than Lennar. But when comparing it to its historical volatility, Moog Inc is 1.47 times less risky than Lennar. It trades about 0.08 of its potential returns per unit of risk. Lennar is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  10,079  in Lennar on May 6, 2025 and sell it today you would earn a total of  1,065  from holding Lennar or generate 10.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Moog Inc  vs.  Lennar

Moog Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moog Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Moog may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Lennar

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lennar are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lennar may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Moog and Lennar

The main advantage of trading using opposite Moog and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moog position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.

The idea behind Moog Inc and Lennar 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.