Correlation Between Morgan Stanley and GRIFFIN MINING

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

By analyzing existing cross correlation between Morgan Stanley and GRIFFIN MINING LTD, you can compare the effects of market volatilities on Morgan Stanley and GRIFFIN MINING 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 Morgan Stanley with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and GRIFFIN MINING.

Diversification Opportunities for Morgan Stanley and GRIFFIN MINING

-0.38

Correlation Coefficient

Morgan Stanley  GRIFFIN MINING

Very good diversification

The 3 months correlation between Morgan and GRIFFIN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD and Morgan Stanley 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 Morgan Stanley are associated (or correlated) with GRIFFIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIFFIN MINING LTD has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between Morgan Stanley and GRIFFIN MINING

Assuming the 90 days trading horizon Morgan Stanley is expected to generate 0.99 times more return on investment than GRIFFIN MINING. However, Morgan Stanley is 1.01 times less risky than GRIFFIN MINING. It trades about 0.14 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about 0.0 per unit of risk. If you would invest  10,966  in Morgan Stanley on October 24, 2024 and sell it today you would earn a total of  2,086  from holding Morgan Stanley or generate 19.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Morgan Stanley  vs.  GRIFFIN MINING LTD

Morgan Stanley

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Morgan Stanley unveiled solid returns over the last few months and may actually be approaching a breakup point.

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIFFIN MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GRIFFIN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Morgan Stanley and GRIFFIN MINING

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

The idea behind Morgan Stanley and GRIFFIN MINING LTD 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.