Correlation Between Kandi Technologies and Morgan Stanley

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

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

Diversification Opportunities for Kandi Technologies and Morgan Stanley

-0.6

Correlation Coefficient

Kandi Technologies  Morgan Stanley

Excellent diversification

The 3 months correlation between Kandi and Morgan is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and Kandi Technologies 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 Kandi Technologies Group are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Morgan Stanley go up and down completely randomly.

Pair Corralation between Kandi Technologies and Morgan Stanley

Given the investment horizon of 90 days Kandi Technologies Group is expected to generate 3.42 times more return on investment than Morgan Stanley. However, Kandi Technologies is 3.42 times more volatile than Morgan Stanley. It trades about 0.09 of its potential returns per unit of risk. Morgan Stanley is currently generating about 0.04 per unit of risk. If you would invest  98.00  in Kandi Technologies Group on October 17, 2024 and sell it today you would earn a total of  8.00  from holding Kandi Technologies Group or generate 8.16% return on investment over 90 days.

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

Kandi Technologies Group  vs.  Morgan Stanley

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Morgan Stanley

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Morgan Stanley may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kandi Technologies and Morgan Stanley

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

The idea behind Kandi Technologies Group and Morgan Stanley 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.