Correlation Between Mawson Infrastructure and Morgan Stanley

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

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

Diversification Opportunities for Mawson Infrastructure and Morgan Stanley

0.32

Correlation Coefficient

Mawson Infrastructure  Morgan Stanley

Weak diversification

The 3 months correlation between Mawson and Morgan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mawson Infrastructure Group and Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley and Mawson Infrastructure 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 Mawson Infrastructure 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 Mawson Infrastructure i.e., Mawson Infrastructure and Morgan Stanley go up and down completely randomly.

Pair Corralation between Mawson Infrastructure and Morgan Stanley

Given the investment horizon of 90 days Mawson Infrastructure Group is expected to under-perform the Morgan Stanley. In addition to that, Mawson Infrastructure is 4.43 times more volatile than Morgan Stanley. It trades about -0.13 of its total potential returns per unit of risk. Morgan Stanley is currently generating about -0.03 per unit of volatility. If you would invest  12,858  in Morgan Stanley on October 10, 2024 and sell it today you would lose (170.00) from holding Morgan Stanley or give up 1.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Mawson Infrastructure Group  vs.  Morgan Stanley

Mawson Infrastructure

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mawson Infrastructure Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Mawson Infrastructure demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 weak basic indicators, Morgan Stanley unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mawson Infrastructure and Morgan Stanley

The main advantage of trading using opposite Mawson Infrastructure and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mawson Infrastructure 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 Mawson Infrastructure 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.