Correlation Between Morgan Stanley and Urban Edge

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

By analyzing existing cross correlation between Morgan Stanley Institutional and Urban Edge Properties, you can compare the effects of market volatilities on Morgan Stanley and Urban Edge 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 Urban Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Stanley and Urban Edge.

Diversification Opportunities for Morgan Stanley and Urban Edge

0.32

Correlation Coefficient

Morgan Stanley  Urban Edge

Weak diversification

The 3 months correlation between Morgan and Urban is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Stanley Institutional and Urban Edge Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urban Edge Properties 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 Institutional are associated (or correlated) with Urban Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urban Edge Properties has no effect on the direction of Morgan Stanley i.e., Morgan Stanley and Urban Edge go up and down completely randomly.

Pair Corralation between Morgan Stanley and Urban Edge

Assuming the 90 days horizon Morgan Stanley is expected to generate 2.55 times less return on investment than Urban Edge. But when comparing it to its historical volatility, Morgan Stanley Institutional is 1.94 times less risky than Urban Edge. It trades about 0.01 of its potential returns per unit of risk. Urban Edge Properties is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,123  in Urban Edge Properties on September 30, 2024 and sell it today you would earn a total of  14.00  from holding Urban Edge Properties or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	64.06%
Values	Daily Returns

Morgan Stanley Institutional  vs.  Urban Edge Properties

Morgan Stanley Insti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morgan Stanley Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Morgan Stanley is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Urban Edge Properties

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Urban Edge Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Urban Edge is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Morgan Stanley and Urban Edge

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

The idea behind Morgan Stanley Institutional and Urban Edge Properties 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.